JONATHAN FAHEY
AP Business Writer
NEW YORK (AP) — General Electric Co. posted strong third quarter results, issued an upbeat forecast for the fourth quarter and said U.S. industrial activity is at its highest level since the financial crisis.
CEO Jeff Immelt said there is uncertainty in the global economy, but that nations around the world are still going ahead with large infrastructure projects and companies are buying equipment.
“It’s a slow growth pattern with volatility but not a lot different than what we’ve seen in the past,” he said in a conference call with investors. He pointed to pockets of high activity in the developing world, slow growth in Europe and Japan, and strength in the U.S.
“The U.S. is probably the best we’ve seen it since the financial crisis,” he said.
GE reported an 11 percent jump in third quarter profit Friday due to cost reductions and strong performance from its aviation and oil and gas divisions.
The company reported net income of $3.54 billion for the quarter on sales of $36.17 billion. Last year during the same period the company earned $3.19 billion on revenue of $35.66 billion.
GE, based in Fairfield, Connecticut, said it earned 35 cents per share for the quarter. GE’s operating earnings, a measure closely watched by investors, rose 6 percent to 38 cents per share.
That was a penny better than analysts surveyed by Zacks Investment Research expected, on average, though the company’s revenues fell slightly short of analyst expectations. Still, shares jumped 3.7 percent to $25.14 in morning trading.
The company told investors to expect a strong fourth quarter thanks to shipments of equipment and better profit margins for its industrial divisions.
“We’ve got a big fourth quarter in front of us, no question about it,” said chief financial officer Jeff Bornstein.
In the third quarter, profit at the company’s oil and gas division, which makes and services drilling equipment, rose 27 percent. Its transportation division also benefited from increasing oil and gas activity. Locomotive sales rose, partly due to increased shipments of oil by rail.
Immelt said the recent plunge in oil prices had made oil and gas companies more cautious but he said they are planning to go forward with big projects that are based on long-term oil prices.
The company’s aviation division, which sells and services aircraft engines and accounts for the biggest share of company profits, also performed well. Profit at the division rose 16 percent to $1.26 billion in the quarter.
Jonathan Fahey can be reached at http://twitter.com/JonathanFahey .
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