GE Reports Profit Up 14% in 2nd Quarter

General Electric Co. said Friday that second-quarter earnings rose 14% as red-hot gas turbine sales carried the day, but reinsurance losses and a write-down on WorldCom Inc. bonds nicked its profit.

GE executives backed the conglomerate’s full-year earnings forecast, which analysts saw as a modestly positive sign that the broader economy might perform better in the second half.

The maker of products ranging from jet engines to light bulbs said it earned $4.4 billion in the quarter, or 44 cents a diluted share, compared with $3.9 billion, or 39 cents, a year earlier.

The results matched analysts’ estimates.

GE’s second-quarter revenue rose 4% to $33.2 billion. Revenue at its power systems business, which shipped 109 gas turbines, surged 27%, to $6.5 billion, while profit there rose 66%.

GE shares rose $1.25, or nearly 4.6%, to close at $28.60 on the New York Stock Exchange.

So far this year, the stock is off about 29%, under-performing the Dow Jones industrial average and the Standard & Poor’s 500 index.

GE’s power systems business--which includes gas turbines and accounted for more than 40% of its quarterly profit--is expected to cool in the second half, but GE is looking to plastics and NBC television to pick up the slack.

Third-quarter profit is expected to rise as much as 25% on an 8% to 10% increase in revenue, GE said.

Chief Executive Jeff Immelt said plastics, for which orders increased 25% in the quarter, is GE’s best leading indicator for the economy.

But Robert Friedman, an equity analyst at Standard & Poor’s Corp., said he is skeptical that GE will continue to post double-digit earnings growth. “I see their rate of growth declining over time,” he said. “I don’t see how you can keep growing earnings 10% to 15% with a company this size.”

After stripping away a one-time favorable tax settlement and gains from GE’s pension plans, Friedman said, the conglomerate’s second-quarter earnings per share increased only 5.5%, compared with GE’s stated 13%.

GE has not escaped the accounting concerns plaguing markets worldwide as investors digest scandals at collapsed energy trader Enron Corp. and telecom giant WorldCom.

GE has defended its pension accounting in recent days, saying it is proper and conservative. But analysts said concerns are weighing on the company, whose market capitalization approaches $290 billion.