Growth in businesses such as oil and gas has helped America’s biggest engineering firm to lift profits.
In its latest announcement, General Electric says that at $US3.8 billion, June quarter operating profits (underlying profit) were up by eight per cent compared with the same quarter last year.
Net profit after tax from continuing operations according to Generally Accepted Accounting Principles (GAAP), meanwhile, rose 13 per cent to come in at $US3.6 billion.
Leading the way was the company’s industrial segment, which includes all of the company’s operations in electricity, water, oil and gas, energy management, aviation, transportation and appliance and lighting.
Profit in this segment rose nine per cent to $US4.2 billion on revenue increases of seven per cent on strong results in oil and gas (profit up 25 per cent to $US665 million), aviation (up 12 per cent to $1.197 billion) and appliances and lighting (up 23 per cent to $US102 million).
New orders for services were up 14 per cent, but those for new equipment dropped three per cent to $US13.0 billion.
Meanwhile, the company is moving forward with efforts to scale back its finance business – which it wants to account for only 25 per cent of profit by 2016 (down from around 29 per cent now), announcing a planned initial public offering of its North American Retail Finance business for the end of July.
The latest result follows last month’s acceptance by the French Government of GE’s $17 billion for offer for Alstom’s Power and Grid business, after current owner Bouygues SA (EN) agreed to sell a 20 per cent stake to France – a deal expected to close next year after shareholder and customary regulatory approvals which will, according to Bloomberg reports, represent GE’s biggest ever acquisition.
The results also follow the announcement of $36 billion in contract wins for new jet engines on the part of a joint venture GE owns with French aircraft and rocket manufacturer Snecma at the Farnborough (UK) Airshow last week, including a single $US 13billion with Middle East carrier Emirates.
Company chairman Jeffrey Immelt welcomed the latest results.
“GE had a good performance in the quarter and in the first half of 2014, with double-digit industrial segment profit growth, 30 basis points of margin expansion, and nearly $6 billion returned to shareholders,” Immelt said. “The environment continues to be generally positive.”