GE Meets Earnings Growth Forecast

General Electric Co. on Friday said third-quarter earnings rose 25% as NBC television and the sale of its Internet commerce unit helped offset sluggish plastics demand and weakness in its key aerospace and power markets.

GE executives said they expect solid growth next year but plan aggressive cost cutting throughout the company. They said GE power systems, whose business has slowed after a long boom cycle, faces “dramatic restructuring.”

The maker of light bulbs, jet engines and appliances said it earned $4.1 billion, or 41 cents a share, compared with $3.28 billion, or 33 cents, a year earlier. Revenue rose 11% to $32.6 billion.

GE met Wall Street’s third-quarter expectations, and the company backed its earnings target of $1.65 per share for the year. That’s up 20% from the $1.37 per share it earned in 2001.

Chairman Jeffrey Immelt provided the first glimpse of GE’s 2003 outlook. And Wall Street was glad to have it, as his remarks helped propel a broad-based stock rally.

“Even in a very tough environment, our short-cycle businesses will experience good growth” in 2003, he said.

GE recorded a one-time gain of $317 million from the sale of its GXS Internet commerce business.

Top-rated television shows at NBC, which capitalized on strong ad pricing, boosted profits at that unit by 59%.

But GE plastics saw growth stall in the third quarter, contributing to a 19% profit decline at the unit.

As expected, profit at GE’s aircraft engine unit fell because key commercial airline customers continue to struggle.

GE shares rose $1.61, or 7.1%, to $24.21 on the New York Stock Exchange.