GE Posts 16% Profit Rise in 1st Quarter

General Electric Co., the world’s largest company with businesses ranging from aerospace to broadcasting, on Thursday posted a 16% jump in first-quarter profit, driven by its industrial operations.

The quarter was carried by gains in GE’s power systems and aircraft segments, offsetting the weaker broadcasting and appliance results, which suffered from a slowing U.S. economy.

GE said earnings from ongoing operations totaled $3.017 billion, or 30 cents a share, up from $2.592 billion, or 26 cents, in the same quarter last year. Including 2001 accounting changes, the company posted a profit of 26 cents.

The results met Wall Street targets. Analysts on average had pegged GE earnings at 30 cents for the period, with estimates ranging from 29 to 31 cents, according to tracking firm First Call/Thomson Financial.

Revenue rose 1.6% to $30.49 billion at the Fairfield, Conn.-based conglomerate.

“The record results for the first quarter once again demonstrate the ability of GE’s diverse mix of leading global businesses to deliver earnings growth, increased margins and strong cash generation despite a challenging economic climate,” said Jack Welch, chairman and chief executive.

Industrial operations generated an 11% increase in revenue, boosted by the power, medical system and aircraft engine segments.

GE’s Power Systems business, which provides turbines, generators and energy services, posted the strongest results among the company’s divisions, with a 33% jump in revenue thanks to strong demand for new generation equipment. Orders were up 68% from a year ago.

Together, the long-cycle businesses saw profit rise 36%; short-cycle businesses, more affected by economic conditions, reported a 5% decrease in operating profit.

“The results were really driven by GE Power,” said William Fiala, an analyst at Edward Jones, noting that other businesses struggled in the face of tough economic conditions. “They’re managing through it, but it’s a very difficult business environment. There is only so much you can do when you have the economy blowing in your face.”

At the NBC broadcasting operation, profit declined 12% as revenue fell 3%. Profit also was down in the appliance sector, by 2.6%, as sales fell 5%.

But analysts noted that results from GE’s weaker divisions might still top those from competitors that face the same market and economic conditions. What’s more, among conglomerates and diversified industrial companies, analysts say, GE has a clearer picture of the landscape ahead.

“In this kind of environment, this is the company with the four-wheel-drive capability to continue to be able to navigate this economy,” said Nicholas Heymann, analyst at Prudential Securities in New York. “You’ve got a really good case for outperformance in what we think will be a continuing very challenging and downward trending market well into the fall.”

At GE Capital Services, income rose 16% to $1.4 billion, on strength in consumer services, equipment management and specialty insurance segments.

But the group’s revenue fell 6% because of GE’s decision to exit businesses that had been included in results from a year ago, such as Montgomery Ward, Mortgage Services and Auto Financial Services.

GE generated record cash of $3.1 billion in the quarter, up 18% from a year ago. The company bought back $852 million worth of stock during the period.

GE is the world’s largest company based on stock market capitalization. Its stock, a component of the Dow Jones industrial average, rose $1.43 to $44.70 in trading on the New York Stock Exchange.

At a Glance

Other earnings, excluding one-time gains or charges unless noted, include:

* Abbott Laboratories Inc. posted a 6% increase in first-quarter earnings to $734.9 million, or 47 cents a share, in line with analyst expectations, boosted by strong U.S. pharmaceutical sales. Revenue rose 6.2% to $3.56 billion.

* Biogen Inc. posted a 9% rise in first-quarter operating profit to $70.6 million, or 46 cents a share, in line with forecasts, fueled by sales of its only marketed drug, Avonex, a treatment for multiple sclerosis. Revenue was up 9% to $237 million.

* Pier 1 Imports Inc.’s profit rose 7% in its fiscal fourth quarter to $36.5 million, or 38 cents a share, a penny better than forecasts, as sales rose 13% to $430.5 million.

* Paper and lumber companies Boise Cascade Corp. and Willamette Industries Inc. cited lower lumber prices and rising energy costs for profit declines in the first quarter. Boise’s earnings plunged 82% to $7.1 million, or 7 cents a share, a penny better than forecasts, as sales fell 4.7% to $1.9 billion. Willamette’s profit fell 21% to $67.3 million, or 62 cents a share, one cent better than forecasts, on a 3% decline in sales to $1.13 billion.

* San Marino-based East West Bancorp, the parent of East West Bank, said first-quarter net income rose 14% to $9.9 million, or 41 cents a share. Total assets held for the period ended March 31 rose 9% to $2.5 billion.