USA: GE Earnings Rise

GE announced today second-quarter 2012 Operating Earnings of $4.0 billion, or $0.38 per share, up 7% and 12% respectively from the second-quarter of 2011.

GAAP earnings from continuing operations were $3.7 billion, up 2%, or $0.34 per share, up 3%. Revenues were $36.5 billion for the quarter, up 2%. Industrial segment revenue grew by 9%, with organic growth of 10%. The strength of GE’s Industrial portfolio was underscored by strong segment profit increases in Energy, Oil & Gas and Transportation. The company is performing well and is on track to deliver double-digit earnings growth in 2012 for both Industrial and GE Capital segments.

“Today’s results demonstrate that we are executing on our growth strategy in the midst of a still volatile global economy,” said GE Chairman and CEO Jeff Immelt. “GE Capital’s strong operating performance and capital position allowed it to return a $3 billion dividend to the parent, and our Industrial segments delivered another quarter of double-digit organic revenue growth. Our strategy to invest in growth markets is paying off, as we achieved orders expansion in growth markets of 14% and revenue growth of 17%. We ended the quarter with a record backlog.”

Infrastructure orders were $23.1 billion, down 1% primarily driven by a 37% decrease in orders for wind turbines. Orders were up 8% on a year-to-date basis. Total orders performance included: Aviation up 5% and Transportation up 2%. Orders for the quarter included: GE Transportation orders for 176 locomotives from railroad customers in North America, up 28% from second-quarter 2011. In Australia, GE Energy is supplying 5 Frame 6B gas turbines, 3 SC4 single-flow steam turbines and 5 heat recovery generators to provide 500 megawatts of installed power capacity for a combined cycle power plant for the Ichthys liquefied natural gas (LNG) project. It will enable the facility to produce more than 8 million tons of LNG each year. In Russia, GE Energy signed a deal with REP Holding for the assembly of 28 GE MS 5002E gas turbines.

Total revenues for the quarter were $36.5 billion, up 2%. Revenues were negatively impacted by $0.9 billion due to FX and further shrinkage of our GE Capital business. GE’s second-quarter Industrial segment revenues were $25.0 billion, up 9%. Industrial segment organic revenues were up 10% for the quarter. Industrial growth market revenues were up 17%, driven by double-digit growth in Australia, Canada, China, Latin America, the Middle East/North Africa, Southeast Asia and Russia.

Industrial segment profit was up 7% to $3.7 billion and segment operating profits were strong in Energy Infrastructure and Transportation, up 13% and 58%, respectively. In addition, pricing on orders was up 1.2% in total with higher prices in 4 out of 5 businesses. Energy Infrastructure pricing was up 1.8%. Cash generated from operating activities was up 55% at $6.8 billion. GE ended the quarter with $74 billion of consolidated cash and cash equivalents.

Immelt concluded, “Our Industrial outlook remains positive. Margins have stabilized and Energy, Oil & Gas, and Transportation performed very well with double-digit profit increases. We are confident in our double-digit EPS growth expectations for 2012 and are raising our operating cash expectations to $17-19 billion based upon the restart of the GE Capital dividend.”

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LNG World News Staff, July 20, 2012