GE tops Wall Street estimates on overseas demand
By Scott Malone, BOSTON(Reuters): General Electric Co notched a better-than-expected 21.6 percent rise in earnings, helped by strong demand for equipment used in oil and natural gas production and jet engines.
The largest U.S. conglomerate said on Friday its second-quarter results were helped by a rebound in sales of railroad locomotives, which offset weakening demand for wind turbines. With overall orders up 24 percent, pushing the company's backlog to $189 billion, Chief Executive Jeff Immelt said he was confident about the rest of the year.
"We are optimistic about our growth prospects in the second half and beyond," Immelt said.
The company's industrial revenues outside the United States were up 23 percent in the quarter, outperforming the overall company, which recorded a 7 percent rise in sales from continuing operations.
Investors said the results showed the Fairfield, Connecticut-based company's focus on emerging markets was paying off.
"GE's strategy of growth in developing nations and energy and infrastructure and healthcare and technology is serving it well," said Perry Adams, vice president and senior portfolio manager at Huntington Private Financial Group, in Traverse City, Michigan, which holds GE shares.
The rise in orders is a key sign that GE will be able to continue its pace of growth, said Nick Heymann, an analyst at William Blair & Co.
"That's the path back to the future," he said.
The results sent GE shares up 1 percent to $19.40 in premarket trading, on a day when fellow blue-chip industrial Caterpillar Inc missed profit forecasts, sending its shares down and weighing on the broader stock market.
As of Thursday's close, GE shares had risen 26 percent over the past 12 months, ahead of the 23 percent rise in the Dow Jones industrial average.