GE reports surge in industrial revenues

General Electric, the US industrial conglomerate and global economic bellwether, reported a surge in third-quarter industrial revenues on Friday thanks to its recent acquisitions and strong growth in emerging markets.

In the three months to the end of September, industrial revenues jumped 19 per cent to about $23.4bn. Industrial revenues from international markets such as Brazil, Russia and China were particularly strong, rising 25 per cent.

The third-quarter results were complicated by a number of one-off events, however. Net income attributable to GE shareholder rose 18 per cent to $2.3bn, giving earnings of about 22 cents per share, up 22 per cent compared with the same period a year earlier.

Those results were flattered by the impact of certain one-off loss provisions in the third quarter of 2010, but dented by the cost of redeeming $3.3bn of preferred stock bought by Warren Buffett’s Berkshire Hathaway during the credit crunch.

GE is one of the world’s biggest companies by revenues, selling everything from consumer loans to aircraft engines and energy-efficient lightbulbs. The company struggled during the financial crisis when its large financial services arm found it difficult to gain access to credit markets, and in the aftermath the company pledged to return to its industrial roots.

In recent quarters the company has recovered and, with its improved cash flow, has been aggressively adding to its energy equipment business, spending about $11bn on companies such as Dresser and the well support unit of John Wood Group.

During the quarter, GE’s energy infrastructure group, which makes gas turbines, and its transportation unit, which makes train engines, performed well. Revenues jumped 30 per cent to $10.8bn and 48 per cent to $1.3bn respectively.

GE Capital, however, continues to drive earnings performance at the company, and while its third-quarter revenues were flat at about $11.1bn, operating profits rose 79 per cent to $1.5bn.

The results follow strong reports from other US industrial groups including United Technologies, Danaher and Parker Hannifin, many of which raised their guidance on expected earnings for the full year but tempered those predictions with more cautious outlooks for 2012.

“We continue to successfully navigate a volatile global economy,” Jeff Immelt, chief executive of GE said in a statement. “Our investment in research and development and global expansion is paying off with robust organic growth.”

Still, GE said its industrial margins continued to decline from a year-ago due in part to lower prices for its wind turbines. Heavy competition from China has hit a number of manufacturers in the sector.

In early trading, GE shares were down 1.6 per cent to $16.36. Over the year to date the stock has fallen about 9 per cent compared with a 3 per cent decline for the S&P 500 index.