Daily News: July 18, 2014

GE Capital Profit Off 5%, CLL Earnings Drop 34%

GE announced Q2/14 operating earnings of $3.9 billion was up 8% from the second quarter of 2013. GAAP earnings from continuing operations were $3.6 billion, up 13% from last year. Revenues were $36.2 billion for the quarter, up 3% from the year-ago period.

GE Capital Q2/14 profit, after preferred stock dividends, of $1.703 billion was down 5% from $1.789 billion a year earlier. Revenues of $10.2 billion were down 6% from $10.9 billion at the end of Q2/13.

Commercial Lending and Leasing (CLL) earnings of $541 million were down 34% from $825 million in Q2/13. CLL revenues of $3.6 billion were down 8% from revenues of $3.9 billion a year earlier. CLL was shown to have assets of $174.3 billion at Q2/14 versus $173.5 billion at Q2/13.

GE Capital continued its strategy to decrease the size of its non-core portfolio. ENI (excluding cash and equivalents) was at $371 billion at quarter-end, down $2.4 billion from last quarter and down 5% from the year-ago period.

GE Capital’s estimated Tier 1 common ratio (Basel 1) rose 51 basis points from the year-ago period to 11.7%, and net interest margin was strong at 5%. Through the first half of the year, GECC has returned $1.4 billion in dividends to the parent. GECC recorded tax benefits in the quarter to reflect a lower expected tax rate for 2014, primarily driven by its planned tax-efficient disposition of the consumer bank in the Nordics.

GE also announced that it is targeting the IPO of its North American Retail Finance business (Synchrony Financial) for the end of July, the first step in a planned, staged exit from that business.

To read the entire GE Capital press release, click here.