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General Electric's profit rises 15 percent

General Electric Co., whose businesses range from building jet engines and power plants to making loans and operating the NBC television network, said Friday its third-quarter earnings increased 15 percent despite losses from hurricanes as all its major segments posted double-digit percentage profit growth.
/ Source: The Associated Press

General Electric Co. said Friday profit rose 15 percent in the third quarter as its global growth offset hurricane losses.

Net income at GE, with businesses from building jet engines and power plants to making loans and operating the NBC television network, rose to $4.67 billion, or 44 cents a share, for the three months ended Sept. 30 from $4.07 billion, or 38 cents per share, a year ago. Revenue climbed 9 percent to $41.9 billion.

(MSNBC is a joint venture of Microsoft and NBC, which is a GE company.)

The results matched analysts’ expectations for profit of 44 cents a share, a Thomson Financial survey showed.

“Despite a volatile environment, our fundamentals remain very strong, as we achieved double-digit earnings growth across all six of our businesses,” said Jeff Immelt, GE’s chief executive.

In a conference call with analysts, Immelt said GE expects profit growth of 10 percent to 15 percent next year. He said he hopes to cut costs by about $1 billion in coming years and that the company was not planning major acquisitions.

“We’re really not counting on any huge moves with the portfolio,” Immelt said. “I think we like the company the way it looks today.”

GE’s global sales grew 16 percent in the quarter, and Immelt said China would account for about $5 billion of revenue this year. The company made its first real-estate investment in India during the quarter, acquired Korea’s third largest credit card company and Turkey’s third largest bank.

“The company has done an excellent job globalizing,” said Bob Schenosky, an industrial analyst with Jefferies & Co.

Orders increased 11 percent, services sales rose 9 percent and the company had double-digit revenue growth in markets such as China and Europe.

GE also incurred $377 million of hurricane-related reinsurance losses, but that was partially offset in the third quarter by a gain of about $250 million from the sale of its insurance business.

By segment, profits jumped 56 percent to $629 million at GE’s industrial business, and 28 percent to $1.45 billion at its commercial finance unit, based in Stamford.

Earnings increased 17 percent to $1.88 billion at the company’s infrastructure business on orders for airline engines, rail and wind energy.

Profit rose 13 percent to $603 million at NBC Universal even as sales fell 26 percent to $3 billion from a year earlier, when NBC broadcast the summer Olympics. GE said Universal Picture’s “40-Year-Old Virgin” surpassed $100 million in domestic box-office receipts, but NBC has lost popular television shows in recent years such as “Friends.”

GE officials said the company is making progress in its efforts to rebuild prime-time programming, but forecast losses at the NBC Universal unit in the fourth quarter and next year. Schenosky said he expects the company to focus on improving the next season of shows.

“It is what I would consider a flagship business and part of the face of the company,” Schenosky said.

Earnings rose 19 percent to $810 million at the company’s consumer-finance unit, which has been acquiring banks and credit-card businesses in fast-growing emerging markets such as Turkey and India.

GE expects per-share earnings for the year of $1.81 to $1.83. The consensus of analysts surveyed by Thomson Financial is for earnings of $1.82.