GE 2Q profit up 21 percent, financial arm improves
NEW YORK — General Electric Co. said Friday that earnings grew 21 percent in the second quarter as its GE Capital lending arm continued to recover from the recession.
The industrial and financial giant reported income of $3.76 billion, or 35 cents per share, for the three months ended June 30. That compares with $3.11 billion, or 28 cents per share, for the same part of last year.
Revenue fell 4 percent to $35.6 billion, in part because of GE's sale of a majority stake in NBC Universal to Comcast in February.
GE's results beat Wall Street estimates for 32 cents per share on revenue of $34.7 billion, according to FactSet.
GE Capital more than doubled its profit to $1.66 billion during the quarter. The earnings growth signals a continuing rebound for the lending business. After booking billions of dollars in losses and impairments during the recession, GE Capital has been shedding assets. And the commercial real estate market overall has been slowly improving as the U.S. economy gradually recovers.
"We continue to see strong demand for credit," GE Chairman and CEO Jeff Immelt said. Income at GE's consumer and commercial lending businesses grew 57 percent and 100 percent, respectively.
The Fairfield, Connecticut, company also said that revenue growth was especially strong internationally; including India, China, Southeast Asia, Africa, Russia, Australia, Canada and Latin America.
GE's locomotive business soared from April to June with profits jumping nearly sevenfold to $178 million.
The company's industrial business posted modest results compared with smaller rivals. Medical and industrial instruments maker Danaher Corp.'s earnings jumped 74 percent in the second quarter while United Technologies posted a 19 percent jump in its second-quarter profit.
GE's aviation business recorded a 9 percent increase in earnings, and its health care business increased profits 8 percent. Profits dropped, however, at GE's energy infrastructure business by 19 percent as prices slumped for wind turbines and other renewable energy equipment.
The company has been aggressively expanding its energy business with a string of deals during the last nine months that are worth about $11 billion. GE plans to buy Converteam, Dresser Inc., Wellstream Holdings, Lineage Power Holdings and the well-support business of John Wood Group.
"We are optimistic about our growth prospects in the second half and beyond," Immelt said.
Shares rose 39 cents to $19.55 in premarket trading.