GE Capital Increases Profits 31%
The conglomerate founded by light bulb inventor Thomas Edison has pumped billions of dollars into new energy-related businesses during the past few years while selling its stake in NBC, commercial real estate and other businesses. The move has softened the blow from the recession, and it expects double-digit earnings growth this year.
GE said Friday that net income fell 16 percent in the second quarter, mainly due to lingering charges from financing companies that were sold off several years ago. Its energy infrastructure business, meanwhile, reported double-digit growth in the period, and profits surged for its transportation business. The company’s quarterly results topped Wall Street expectations.
GE is wading through “a still volatile global economy,” CEO Jeff Immelt said. But its core businesses are growing profits, and “we ended the quarter with a record backlog.”
Shares rose 7 cents to close at $19.87 on Friday after trading as high as $20.37 earlier in the day, approaching their 52-week high of $21 per share.
The industrial and financial giant posted net income of $3.11 billion, or 29 cents per share, in the April-June period. That compares with $3.69 billion, or 35 cents per share, a year earlier.
Excluding pension costs and losses from discontinued businesses, GE earned 38 cents per share, a penny above analysts’ average expectations of 37 cents per share.
GE Capital, the company’s lending arm, increased profits 31 percent as it sold off dozens of properties and booked smaller charges related to a drop in real estate values. GE plans to sell its business property lending business to EverBank Financial Corp. for $2.51 billion by the end of 2012.