GE Reports 20% Surge in Profit for 2nd Quarter
General Electric Co. said its second-quarter profit rose 20%, led by strong growth in its power systems, aircraft engines and NBC units.
GE’s earnings came to $3.38 billion, or 34 cents a share, up from $2.82 billion, or 28 cents per share, in the same period a year ago, on a 20% rise in revenue to $32.86 billion.
The results beat Wall Street expectations by 1 cent per share, according to First Call/Thomson Financial.
Despite the better-than-expected results, GE’s stock fell amid overall weakness in blue chips. GE shares closed off $1.25 at $52.50 on the New York Stock Exchange.
The company said all seven of its business segments had strong growth.
At GE’s Power Systems division, earnings rose 46% to $752 million. The company said strong demand for new power-generation equipment in the United States drove orders up 80% from the same quarter last year to $5 billion.
At the NBC television network, profit rose 17% to $635 million. NBC tied for first place during the May ratings period in the key adult 18-to-49 demographic category.
Earnings were up 17% to $1.28 billion at GE Capital Services, the company’s financial services unit.
At Aircraft Engines, profit jumped 20% to $609 million. The unit continued to win the majority of the world’s orders for airline jet engines, including a $1-billion order from Southwest Airlines and orders totaling nearly $900 million from American Trans Air.
“The record results for the second quarter once again demonstrate the ability of GE’s diverse mix of leading global businesses to deliver top-line growth, increased margins and strong cash generation,” Chairman John F. Welch said.
At a Glance
Other earnings, excluding one-time gains or charges unless noted:
* Fannie Mae, the No. 1 U.S. buyer of home mortgages, said second-quarter profit rose 15% to $1.1 billion, or $1.05 a share, in line with forecasts, as the company earned more from its growing mortgage loan portfolio and as it bought back debt.
* J.P. Morgan & Co.’s second-quarter earnings rose 7.5% to $542 million, or $2.90 a share, well beyond the $2.45-a-share analysts had forecast. Revenue rose 13% to $2.45 billion. Morgan overcame a decline in business from its bond and currency market customers in the quarter by making profitable trades using its own capital in the stock and bond markets. Profit from trading and investing with the bank’s money was $230 million before taxes, contrasted with a loss of $20 million a year ago. Profit from the company’s investments in stocks was $119 million before taxes, compared with a loss of $7 million.
* Maytag Corp.’s profit fell 14% in the second quarter to $75.7 million, or 92 cents a share, on lower sales of appliances for the commercial and low-end markets and increased costs. The earnings were a penny better than estimates. Revenue edged up 1.7% to $1.1 billion.
* McClatchy Co., publisher of the Bee newspapers in California and the Minneapolis Star Tribune, said second-quarter profit rose 13% to $24.8 million, or 55 cents a share, 2 cents better than forecasts, on higher advertising sales and lower costs. Sales rose 5% to $286.4 million.
* PepsiCo Inc. said second-quarter profit rose 21% to $563 million, or 38 cents a share, boosted by sales of new Tostitos and Ruffles snacks and new ads for Pepsi colas. The results beat the consensus estimate of 36 cents. Revenue grew 9% to $4.93 billion.
* Visx Inc., maker of lasers used to correct vision, said second-quarter profit fell 26% to $16 million, or 18 cents a share, a penny better than estimates, as the company charged doctors less to use its devices. Sales fell 23% to $48 million.
