CEO Says GE’s Profit May Rise as Much as 17% in ’05

General Electric Co. Chief Executive Jeffrey Immelt said Tuesday that profit would rise as much as 17% next year and return to growth of at least 10% annually “for the foreseeable future” as new businesses spur sales.

Profit at the world’s biggest company in terms of market value will increase next year to $1.75 to $1.83 a share from $1.57 to $1.60 this year, Immelt said in his annual presentation to investors and analysts in New York. In 2006, profit will rise as much as 15%, he said.

Immelt, 48, has expanded General Electric into faster-growing areas like healthcare, security and consumer finance while selling lower-return units like insurance. Areas where profit growth slowed over three years -- energy equipment and jet engines -- are projected to improve, helped by new products, service sales and economic growth. Sales will rise 10% next year from about $150 billion in 2004, he said.

The “2005 performance is going to be very strong and very broad-based,” Immelt said. “As we look out beyond ‘05, we see a set of businesses that can consistently deliver 10% to 15% earnings growth.”

Shares of Fairfield, Conn.-based General Electric fell 10 cents to $37.38 on the New York Stock Exchange. They have climbed 21% this year, compared with an 8.2% gain in the Standard & Poor’s 500 index.

Analysts estimate that per-share profit will increase 13% in 2005 to $1.79 from $1.58, according to a survey by Thomson First Call. Net income in 2004 should rise 9.6% to $16.4 billion, Thomson said.

General Electric expects earnings increases of 10% or greater at nine of its 11 main businesses in the fourth quarter and at all of the units except insurance next year as it sells off more of its Genworth mortgage and life insurance business.

In the five years before Immelt replaced Jack Welch as chief executive, profit increased by as much as 19% a year. Since Immelt took over, General Electric has agreed to spend at least $65 billion on businesses including healthcare and consumer finance.

Immelt is expanding in countries like China and pushing research for new products and services as he moves into such industries as water treatment. More customers are using a higher percentage of their factories as economic growth continues, which bodes well for orders, he said.