Thread: GE's Profit Jumps 77%

APRIL 21, 2011, 1:25 P.M. ET.

GE's Profit Jumps 77%

By BOB SECHLER

General Electric Co. reported a 77% increase in first-quarter earnings, lifted by marked improvement at its GE Capital financing arm and gains at most of its industrial units.

The company also boosted its quarterly dividend by a penny to 15 cents. The move marks GE's third dividend increase in the past year, although the payout remains well short of GE's 31-cent dividend from before the financial crisis and economic downturn.

More
GE Grows Hopeful About Turbine Business
Deal Journal: GE Halts Deal Making in '11
Strings Attached to Options Grant for GE's Immelt (4/20/2011)
How You Can Pull a GE on Taxes (04/01/2011)
GE-Whizzes: Everyone's Looking for an Edge on Taxes (03/31/2011)
.
If General Electric pays close to zero in Federal Income taxes, can you? Brett Arends tells Kelsey Hubbard how even a "regular Joe" can lower their tax bill, especially if they are self-employed.
.
"Our environment continues to improve and get better," said Chairman and Chief Executive Jeff Immelt on a call with analysts, noting that the restructuring of GE Capital was ahead of plan while the quarter saw a record backlog of orders for its industrial products and services.

Mr. Immelt also said the company is finished with major acquisitions for 2011 after announcing $11 billion in deals over the last six months to expand its energy unit. The moves include a $3.2 billion agreement last month to buy a controlling stake in French power-conversion company Converteam, and a $2.8 billion deal in February to buy the well-support division of John Wood Group PLC.

"The major transactions we plan on doing, we've done," Mr. Immelt said, adding that GE will now "tend toward dividends and [stock] buybacks" as a use of cash.

He called the latest dividend increase a show of confidence in GE's outlook but said the company aims to eventually return to its pre-downturn tradition of predictable, annual increases.

"Over time, we're going to get back to an annual dividend increase that investors can count on," Mr. Immelt said.

GE shares were off about 2.1% in midday trading at $19.95. The stock is up 12% year to date through Wednesday, with GE's strong first-quarter results following a fourth-quarter report in January that showed substantial evidence of a turnaround.

Regardless, Mr. Immelt reiterated confidence that the Fairfield, Conn., company will achieve goals laid out in its 2011 financial framework, which among other things calls for about 5% revenue growth in GE's industrial businesses. GE has been relying on its industrial units to fuel its long-term prospects as it moves to shrink GE Capital, which once accounted for half the conglomerate's profit but became a severe drag during the financial crisis.

Now Reporting
Track the performances of 150 companies as they report and compare their results with analyst estimates. Sort by date and industry.


More photos and interactive graphics

.
Loan-loss provisions continue to decline, and the company said the real-estate market was "firming."

GE ended the first quarter with a $177 billion backlog of orders for big-ticket equipment and services, up from $175 billion at the end of the fourth quarter.

New equipment and services orders totaled $19 billion, up from $17.1 billion in the year-ago period but down from $24.8 billion in the fourth quarter.

GE reported a first-quarter profit of $3.43 billion, or 31 cents a share, up from $1.95 billion, or 17 cents a share, a year earlier. The company's operating earnings, which exclude discontinued operations and other items such as nonoperating pension costs, rose to 33 cents a share from 20 cents. Revenue rose 6.2% to $38.45 billion.

Analysts polled by Thomson Reuters most recently forecast earnings of 28 cents a share on $34.64 billion in revenue.

GE Capital, the company's biggest segment by revenue, saw its top line rise 3.3% while profit more than tripled. GE's energy infrastructure and aviation arms saw their revenue rise 9.2% and 4.9%, respectively.

The energy infrastructure unit was GE's only major segment to show a year-over-year profit decline, with earnings off 7%. But executives said orders in the unit increased in the first quarter, and they forecast a return to profit growth in the second half of the year.

http://online.wsj.com/article/SB1000142 ... TopStories

It is heartening to see that GE is doing well since they didn't pay one dime in taxes on the 5 BILLION dollars they made here last year.