GE Records 16% Profit Growth

General Electric Co, reported a 16.1 per cent rise in profit, topping analysts‘ expectations and ending a streak of nine quarters of decline, on strong demand for healthcare and oil and gas equipment.

Our correspondent reported on Friday that the largest United States conglomerate said on Friday that orders, which indicate future sales, rose eight per cent, and Chief Executive, Mr. Jeff Immelt reiterated plans to raise the dividend in 2011

GE shares rose 1 per cent in pre-market trading, though investors noted that revenue came in lower than they had expected.”GE‘s economic environment continues to improve,” said Immelt, who had been driving the company to scale back its hefty finance unit after that business proved to be its weak spot during the recent recession.

“We expect to grow earnings and dividends in 2011 and beyond.”

That marked a brighter tone on the economy for Immelt.GE said net earnings attributable to common shareholders came to $3.03bn in the second quarter, up from $2.61bn a year earlier.

The result, which worked out to 30 cents per share from continuing operations, topped Wall Street‘s forecast of 27 cents per share.Revenue eased 4.3 per cent to $37.44bn, lower than the $38.37bn analysts had expected.”

It‘s a nice beat on the bottom line on EPS, but the revenue number is still light,”the Senior Vice-President and Portfolio Manager at Huntington Asset Advisors in Cincinnati which holds GE shares, Mr. Peter Sorrentino.Cash flow was surprisingly stronger than I expected. That‘s a material improvement.

It looks like it‘s still a cost-cutting story.”The company is in the process of pruning its finance arm — which Immelt says he allowed to grow “too big” — in order to focus on financing equipment purchases, commercial lending and investing in real estate.

Continuing that trend, on Thursday GE reached a $1.9bn deal to sell its controlling stake in Latin American bank BAC-Credomatic to Colombia‘s Grupo Aval GAA.CN.Given the progress in scaling back GE Capital, investors may be willing to look past lower-than-expected revenue, said Jack De Gan, Chief Investment Officer at Harbour Advisory Corp in Portsmouth, New Hampshire, which holds GE shares.”

You can forgive them that shortfall” De Gan said. “Anything that gets them to a smaller GE Capital balance sheet with less risk is going to be viewed positively.”Profit increased 93 per cent at GE Capital as credit losses and impairments declined through the quarter. Earnings at the company‘s technology infrastructure arm fell 11 percent, hurt by weak demand for railroad locomotives.GE, the world‘s biggest maker of jet engines and electricity-producing turbines, experienced an uptick in demand for hospital equipment such as CT-scan machines during the quarter.GE shares rose to $15.47 in pre-market trading. The shares are little changed this year, up 0.5 per cent, compared with a drop of 0.6 percent in the blue-chip Dow Jones industrial average .DJI.The company slashed its dividend by 68 per cent during the financial crisis.The Fairfield, Connecticut-based company expects to close the year with about $25bn in cash, after the NBC sale closes. Part of that money is earmarked to buy back the $3bn in preferred shares GE sold to Warren Buffett‘s Berkshire Hathaway Inc (BRKa.N) in October 2008.