GE Transportation saw earnings fall 6 percent in the fourth quarter of 2016, but still managed a profit of $317 million, according to the General Electric Co. earnings reported released Friday morning.
Profits for the year took a bigger hit, falling 16 percent to $1.06 billion.
Revenues - usually defined as total receipts before expenses are subtracted - fell 23 percent at GE Transportation compared to the fourth quarter of 2016 to $1.24 billion. Revenues for the year were off 21 percent, slipping to $4.71 billion.
By one measure, however, GE Transportation surpassed all other GE businesses, reporting an
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operating profit of 25.5 percent for the most recent quarter.
By comparison, the company's health care division posted an operating profit of 20 percent, oil and gas reported 12.1 percent, aviation returned 24.3 percent and renewable energy produced an operating profit of 6.5 percent.
The lower profits and revenues, however, shouldn't be a surprise to anyone familiar with GE Transportation or the rail freight business.
A sharp decline in rail freight volume, caused in part by a slowdown in mining, prompted GE Transportation to announce late in 2015 that it would reduce its workforce by about 1,500 people.
Those cutbacks took place in the first half of 2016 through a combination of layoffs and retirements.
But the company, which operates its largest facility in Lawrence Park Township, remained profitable. That's good news, said Scott Slawson, president of Local 506 of the United Electrical, Radio and Machine Workers of America at GE Transportation.
"The profit announcements are always good," he said. "It's always good to see the division do well. GE has a history of getting rid of divisions that don't do well."
While he applauded the company's earnings report, Slawson said Friday that, "My thoughts go out to the 1,500 people (former GE employees) who are out on the street."
Slawson, who said the union has been in regular communication with company management, said he's not optimistic that business conditions will improve in the months ahead.
"Orders are down," he said. "There is no other way around it. According to the company, I guess we are going to see a slight uptick in orders here, but overall the transportation business is down."
Meanwhile, GE Transportation's parent company, Boston-based General Electric, reported fourth-quarter sales that fell below analysts' estimates as the persistent slump in the oil market weighed on sales of industrial equipment.
GE revenue fell 2.4 percent to $33.1 billion. That was below the $33.9 billion predicted by analysts, according to the average of estimates compiled by Bloomberg.
Adjusted earnings fell to 46 cents a share.
While the health of GE Transportation is important to thousands of local families supported by those jobs, the performance of parent company General Electric is important for another reason. The company's stock, which fell 68 cents to $30.53 a share Friday, is widely believed to be the most widely held stock in Erie.
The Associated Press contributed to this report.
Jim Martin can be reached at 870-1668 or by email. Follow him on Twitter at twitter.com/ETNMartin.
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