General Electric optimistic despite profit fall
- 20 July 2012
- From the section Business
US industrial giant General Electric (GE) has reported net income of $3.1bn (£2bn) for the second quarter of 2012, down from $3.7bn the same time in 2011.
However, GE's transport business grew by 58% in the quarter, while its energy business followed closely.
GE said orders included a deal to build 176 locomotives for US rail firms, with demand from Australia for gas turbines and single-flow steam engines.
GE is the world's biggest manufacturer of electric turbines and jet engines.
Its transport business, which employs some 12,000 staff worldwide, supplies products including engines for boats, locomotives and mining trucks.
GE said it would break up its giant energy division into three separate units to cut costs.
It was also lifted by an order from Australia for heat recovery generators, which will provide 500 megawatts of installed power capacity for a combined cycle power plant suplying a liquefied natural gas project.
Despite a strong second quarter, GE added that its infrastructure orders were down by 1%, primarily driven by a 37% decrease in orders for its wind turbines.
Elsewhere, its aviation business saw orders increase by 5% and its transportation saw a 2% rise in the quarter.
GE was affected by the eurozone crisis, seeing its European industrial sales fall 7%, while they rose 6% in the US and jumped 24% in China, according to the company's chief financial officer, Keith Sherin.
Its GE Capital business earned $2.1bn, a rise of 31%, which meant it could return $3bn to the parent business.
"GE Capital's strong operating performance and capital position allowed it to return a $3bn dividend to the parent, and our industrial segments delivered another quarter of double-digit organic revenue growth," said GE chairman and chief executive Jeff Immelt.