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VOL. 37 | NO. 29 | Friday, July 19, 2013
GE posts small gain in 2Q profit, sees US pickup
NEW YORK (AP) — General Electric posted a slight gain in net income in the second quarter and said its U.S. operations are picking up steam.
GE said Friday that it earned $3.13 billion, up from $3.11 billion a year earlier. On a per share basis, the company earned 30 cents, up from 29 cents. Revenue fell 4 percent, to $35.12 billion from $36.5 billion.
Adjusted to reflect earnings from continuing operations, GE earned 36 cents per share. That's 2 cents less than adjusted earnings last year, but one cent better than analysts polled by FactSet had expected. GE shares rose 40 cents, or 1.7 percent, to $24.03 in trading before the market opened.
GE, based in Fairfield, Conn., has a broad view of the global economy because it sells a wide variety of industrial equipment and appliances around the world, including jet engines, medical diagnostic equipment, locomotives, washing machines, natural gas-fired turbines, and oil and gas drilling equipment.
CEO Jeff Immelt said orders in the U.S. showed "strong growth," an improvement from recent quarters when he expressed caution about the U.S. market. Immelt said emerging markets remained strong and that Europe has stabilized, but remained weak.
The company's orders for new business rose $7 billion last quarter to a record $223 billion. Immelt said he expects profits to grow in the second half of the year.
GE is in the midst of transforming itself in to a company more focused on industrial businesses. It's been shedding media and other non-industrial divisions and shrinking its banking division. Infrastructure orders rose 4 percent and profit margins for industrial segments rose 0.5 percent. GE Capital earnings fell 9 percent.
Christian Mayes, an analyst at Edward Jones, called the quarter "ho-hum" but noticed some encouraging signs for GE. Revenue slipped at the company's power and water division, which sells and services gas-fired turbines, wind turbines, and water treatment equipment, but the division's profits returned to more normal levels after a terrible first quarter.
He was also encouraged by the improved outlook for the U.S., echoing recent comments by other industrial companies, and by GE's push to further improve profit margins later this year.
"The back half of the year should be better for GE," he said.