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It was the failure on GE’s part to meet analysts’ revenue expectations for the quarter that prompted the drop in share price. GE – the U.S.’s largest conglomerate – reported a 2.8 percent increase in revenue to $36.35 billion, but experts were looking for revenue of $36.94 billion. Company leadership pointed to the recent increasing strength of the dollar as a cause for the revenue shortcomings. A strong U.S. dollar has a diminishing effect on revenues generated abroad.
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Still, net income enjoyed steady gains for the quarter, growing to $3.49 billion, or 33 cents per share, compared to $3.22 billion, or 22 cents per share, from the same quarter a year ago.
Excluding one-time item expenditures, profits would have been right in line with the analysts’ expected 36 cents per share.
Despite being short on revenues, GE assured investors there was no cause for alarm and the company is prepared to still meet full-year earnings forecasts.
McDonald’s (NYSE:MCD) also left investors feeling disappointed when it released its earnings performance for the fiscal third quarter.
For the second consecutive quarter, the fast-food restaurant chain failed to meet Wall Street’s expectations as sales at existing restaurants have felt the added pressure of customer belt-tightening both in the U.S. and Europe.
Net income fell to $1.46 billion, or $1.43 per share, for the quarter, compared to last year’s same-quarter income of $151 billion, or $1.45 per share. Analysts had expected earnings per share of $1.47.
McDonald’s also cited the strengthened U.S. dollar as having an effect on the final numbers, as well as re-energized competition from traditional foes like Burger King Worldwide (NYSE:BKW) and The Wendy’s Co. (NASDAQ:WEN).
The company announced quarterly earnings of $950 million, or $1.20 per share, on Friday. Those results beat expectations by 6 cents per share, and eclipsed last year’s same-quarter earnings of $862 million, or $1.10 per share.
However, Honeywell did scale back its projections on full-year earnings for 2012, sending its price of shares slightly down to $60.80 per share in pre-market trading. The company had originally forecast full year earnings in the range of $4.40 to $4.55 per share, but narrowed the window to $4.45 to $4.50 per share.
Investing Insights: General Electric: Competitors Must Watch These Earnings Drivers.
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