GE Posts Small Gain in 2Q Profit, Sees Pickup in U.S. Ops

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David Paul Morris/Bloomberg via Getty Images General Electric Co. CEO Jeffrey Immelt
By JONATHAN FAHEY

NEW YORK -- General Electric posted a slight gain in net income in the second quarter and said its U.S. operations are picking up steam.

General Electric Co. (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 a 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.


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andrew_macfreaney

Do not believe that numbers. We traveled the world, investigated each and every NATO member country and beyond. The shocking truth: GE does not have in every NATO member country business or representation, and in many countries beyond they are being kicked-out from competition. GE has no defense ready, and what is worse, their management is not educated enough to differentiate the players. GE should not become the 'next DETROIT'.

July 24 2013 at 10:27 AM Report abuse rate up rate down Reply