GE profit surges on jet engines, energy rebound Fri Oct 14, 2005 07:58 AM ET
BOSTON, Oct 14 (Reuters) - General Electric Co. (GE.N: Quote, Profile, Research) on Friday said third-quarter profit rose 15 percent, boosted by rebounding earnings at its energy business and strong demand for jet engines, while sales fell at media arm NBC Universal.
Strong demand for new commercial airplanes continues to drive orders of GE's jet engines and aircraft financing, while a solid economy is spurring activity across the company's array of businesses, including plastics, health care products and commercial finance.
The conglomerate, whose shares rose slightly before the market opened, posted net income of $4.68 billion, or 44 cents per share, compared with $4.07 billion, or 38 cents per share, a year earlier. The results matched analysts' estimates and the company's own forecast last week.
Revenue rose 9 percent to $41.93 billion, ahead of Wall Street expectations for $41.2 billion. Orders rose 11 percent.
Meanwhile, revenue at NBC Universal fell 26 percent from a year earlier when it benefited from advertising from the summer Olympics in Athens. NBC's prime-time television lineup suffered from disappointing ad sales despite solid profits from cable television.
Still, GE's media arm posted a 13 percent increase in profit and all six of GE's main business segments delivered earnings growth of more than 10 percent.
Revenue rose 8 percent and profit increased 6 percent at the energy business, which makes turbines and provides services to power plants. The unit, which is now part of the infrastructure segment, had snapped a string of 10 straight quarters of falling profit with an upturn in the second quarter.
The financial services operation tied to the energy business delivered profit and revenue gains of more than 20 percent.
GE repeated its earnings outlook of $1.81 to $1.83 a share for the full year and forecast fourth-quarter profit of 56 cents to 58 cents. Analysts on average are expecting $1.82 for the year and 57 cents for the quarter.
Chief Executive Jeff Immelt said the Fairfield, Connecticut-based company expects to meet its 8 percent target for annual sales growth, excluding acquisitions and foreign exchange.
"We are well positioned for a strong finish to the year and solid double-digit growth into 2006," Immelt said.
The company said it incurred losses of $377 million from reinsurance losses tied to hurricane-related claims.
For the first nine months of the year, cash flow from operating activities rose 51 percent to $14.7 billion, boosted by increased dividends from GE's financial services businesses and improved cash generation from its industrial units.
As a result, the company has increased its stock repurchase plan for 2005 to $4 billion from $3 billion and said it is running ahead of a three-year program to buy back $15 billion in shares outstanding.
GE shares were up 18 cents at $34.20 on the Inet electronic brokerage from Thursday's close of $34.02 on the New York Stock Exchange.
So far this year, the stock has fallen 7 percent, slightly worse than a 5 percent decline on the Dow Jones industrial average .
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