GE profit jumps 16 percent as jet-engine sales boost ordersJanuary 17, 2014
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NEW YORK — General Electric Co. Friday reported fourth-quarter earnings that jumped 16 percent amid a surge in orders for industrial equipment led by demand for jet engines and electrical turbines.
Adjusted profit from continuing operations rose to $5.42 billion, or 53 cents a share, from $4.66 billion, or 44 cents, a year earlier, the Fairfield, Conn.-based company said in a statement. That matched the 53-cent average estimate of 13 analysts surveyed by Bloomberg.
Chief Executive Officer Jeffrey Immelt is expanding profit margins at GE's industrial units while preparing to shrink its lending business through an initial public offering of the North American consumer-finance business later this year. The company affirmed its forecast for "double-digit" growth in industrial earnings in 2014.
"GE ended the year with strong fourth-quarter earnings and margin growth in an improving but mixed environment," Immelt said in the statement. "We saw good conditions in growth markets, strength in the U.S., and a mixed environment in Europe."
Sales climbed 3.1 percent to $40.4 billion in the quarter, the company said in the statement, topping the $40.1 billion average estimate in a Bloomberg survey of 10 analysts. Industrial sales climbed 6 percent to $28.8 billion.
Profit margins at the manufacturing divisions expanded 60 basis points, or 0.6 percentage point, according to a presentation posted on GE's website. That fell short of guidance for 70 basis points of growth that Immelt first laid out in December 2012 and affirmed as recently as last month.
GE and CFM International, its joint venture with Snecma, won $40 billion of orders for its newest jet engines at the Dubai Air Show in November, helping push the industrial backlog to a record $244 billion, according to the statement. The company sold $700 million of gas turbines to Saudi Electricity Co., following a $2.7 billion order from Algerian power company Sonelgaz in September.
Aviation revenues climbed 13 percent to $6.17 billion, while sales rose 17 percent to $5.31 billion at the oil and gas unit and were little changed at $7.69 billion at the power and water division.
GE Capital, the finance unit, reported sales of $11.1 billion, 4.5 percent lower than a year earlier, the company said in the statement. Profit climbed 38 percent to $2.49 billion.
Including pension costs and discontinued operations, GE's net income rose 4.8 percent to $4.2 billion, or 41 cents a share, from $4.01 billion, or 38 cents, a year earlier.