General Electric, the nation’s largest industrial company, on Friday reported net earnings for the third quarter of $3.2 billion, up 57 percent from the same period in 2010 despite what the chief executive called a “volatile” economic environment.þþThe company said it had operating earnings per share of 31 cents, exactly in line with expectations of analysts surveyed by Thomson Reuters. That excluded the $0.08 per share impact of its redemption of Berkshire Hathaway shares, which it subsequently redeemed this month for $3.3 billion. But the company said it expected that retiring the stock would improve annualized earnings per share by $0.03 in future quarters.þþRevenue for the period from July through September, 2011, was $35.4 billion, which the company described as flat when compared with the third quarter of 2010. When the impact of the sale of NBC Universal to Comcast was excluded, the revenue for the quarter was up 12 percent.þþAnalysts had forecast $34.93 billion in revenue, according to a survey compiled by Thomson Reuters.þþJeffrey R. Immelt, G.E.’s chief executive, said that the company was pleased with the results, the sixth consecutive quarter of double digit growth in operating earnings, in what he called a ÿvolatile macro environment.ÿþþÿWe ended the quarter with a record high order backlog of $191 billion and we remain confident in our full-year 2011 operating framework,ÿ he said in a statement.þþThe earnings report also provided another glimpse into the company’s progress in overhauling its business, which has a diverse range of products from jet engines to medical imaging machines. With its global reach, it also gives a snapshot into how business is faring not only in the United States but around the world.þþThe strongest industrial growth for large American manufacturers has recently come from abroad, accounting for more than half of industrial business in some cases. The outlook for industrial companies has been gradually improving, but in the past month the debt crisis in Europe has caused some concern about economic prospects.þþ“Up until September it was improving but now we have hit this bump in the road,” said Daniel J. Meckstroth, the chief economist for the Manufacturers Alliance /MAPI, an economics and policy research organization in Arlington, Va. He was speaking in general about the outlook for the economy, not specific companies.þþOther markets could pick up the slack to some extent. Asia was decelerating but continuing to do well, with Japan rebounding after the devastation of the earthquake and tsunami, he noted. Companies could also look for more opportunity in Latin America.þþ“It is really a mixed outlook in terms of industrial production worldwide,” said Mr. Meckstroth.þþAs the reporting season gets under way, other industrial companies are weighing in.þþUnited Technologies Corp. this week said its earnings per share for the third quarter were $1.47, up 13 percent compared with the same quarter in 2010. The company raised its full year earnings per share outlook compared with 2010, to $5.47 and said it expected its sales to rise nearly 7 percent to $58 billion for the year.þþHoneywell International Inc. is also announcing its third quarter earnings on Friday. Caterpillar Inc. will report on Monday and Goodrich Corp. reports third quarter results on Thursday.þþG.E. has been expecting its business for power generation equipment, which involves gas, steam and wind turbines, to improve this year. Profits in that component of its business were down 19 percent in the second quarter.þþThe company has invested heavily to expand its industrial divisions, including acquisitions related to oil and gas equipment. Its industrial orders for equipment and services have grown.þþG.E. said that in the third quarter, its industrial segments had $23.4 billion in revenues, up 19 percent. International revenues were up by 25 percent, driven by strong growth in Brazil, Russia, China, India, Canada, Mexico and the Middle East.þþBut it has been gradually paring back its finance business, called GE Capital, as part of a long-term strategy to rely more on its core industrial units — even though GE Capital accounted for much of the profit improvement in the previous quarter.þþGE Capital has been weathering the wake of the financial turmoil unleashed in late 2008.þþIn the third quarter of the year, GE Capital showed a 1 percent rise in revenue to $12 billion. It had a 1 percent decline in revenue in the second quarter, to $11.63 billion, when commercial real estate problems showed losses. GE Capital earned about $1.5 billion, up 79 percent, in the third quarter, the company said.þþAfter the outbreak of the financial crisis, G.E. cut its dividend in 2009, the first time it did so since the Great Depression.þþSince then, it has raised its dividend three times, to 60 cents a share.
Source: NY Times
