GE profits up by 9.6%, to exit subprime

GE profits up by 9.6%, to exit subprime
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First Published: Fri, Jul 13 2007. 06 45 PM IST
Updated: Fri, Jul 13 2007. 06 45 PM IST
Boston: General Electric Co. posted a 9.6% rise in quarterly profit on Friday (13 July) on good results in its commercial finance business and strong demand for products ranging from jet engines to gas turbines.
The company also said it had decided to exit the subprime lending business, where it recorded a loss in the quarter.
GE, whose operations also include NBC media, said second-quarter profit rose to $5.42 billion (Rs2,17,512 crore), or 53 cents per share, from $4.95 billion, or 48 cents per share, a year earlier.
Operating profit came to 52 cents per share, matching the average forecast of analysts polled by Reuters Estimates.
Revenue rose 12% to $42.32 billion.
Profit rose at five of GE’s six segments, declining only in health care, where operating earnings slipped 8%. The company attributed that to regulatory changes.
GE said it expects to report third-quarter earnings from continuing operations of 54 cents to 56 cents per share. Analysts expect 55 cents, according to Reuters Estimates.
The company also said it would repurchase up to $14 billion of its shares this year.
Shares of GE -- the world’s second-largest company by market capitalization, behind Exxon Mobil Corp. -- are up by 4.8% this year.
With the US economy slowing, investors have focused on the Fairfield, Connecticut-based conglomerate’s growth prospects overseas. GE expects to generate half its revenue outside the US this year.
In May, GE agreed to sell its GE Plastics unit to Saudi Basic Industries Corp. for $11.6 billion. The deal, expected to close in the third quarter, will remove from GE’s portfolio a business that had been a drag on profits.
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First Published: Fri, Jul 13 2007. 06 45 PM IST
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