By Alwyn Scott
NEW YORK (Reuters) - General Electric Co (N:GE) reported lower first-quarter underlying revenue, citing weak sales of oil and gas drilling equipment, but it forecast a second-half upturn for power generation products that should help it meet its full-year target.
Shares of the industrial conglomerate were down 1.5 percent after it said organic revenue, a closely watched figure that excludes foreign exchange and discontinued operations, fell 1 percent.
Still, GE affirmed its forecast of 2 percent to 4 percent growth for 2016. Some analysts had said the top end of that range appeared difficult to achieve due to sluggish demand for oil and gas equipment and a weak industrial economy.
The company cut its full-year outlook for oil and gas equipment sales, saying it now expects a 30 percent drop. It had previously forecast a 10 percent to 15 percent decline.
"Given the negative revision in the oil and gas outlook, we believe investors will be viewing this growth forecast with skepticism," RBC Capital Markets analyst Deane Dray said in a research note.
GE said power generation equipment shipments were low in the first quarter, but it expects a pickup in the second half of the year. As a result, second-half organic revenue should be up 5 percent, helping the company hit its target, Chief Executive Officer Jeff Immelt said on a conference call.
"I feel good about how we're executing on the power business," Immelt said, noting anticipated sales of gas turbines and other power generation equipment would be largely responsible for GE hitting its companywide revenue outlook.
The company said first-quarter earnings per share, excluding items, rose 5 percent to 21 cents from a year earlier. Analysts on average were expecting 19 cents, according to Thomson Reuters I/B/E/S.
Foreign exchange costs decreased the figure by 2 cents a share.
GE reported a net loss of $98 million, or 1 cent a share, mainly due to non-cash charges from the sale of financial businesses, part of an ongoing divestiture of the GE Capital unit.
The company said it still expected a full-year profit of $1.45 to $1.55 a share, excluding items.