July 20, 2012
General News

Wind-turbine decline dents GE profit

BY SAABIRA CHAUDHURI | The Wall Street Journal | wsj.com 20 July 2012

General Electric Co.’s second-quarter earnings fell 18% amid a drop in wind-turbine orders, though profit increased at the company’s industrial businesses.

GE on Friday reported a profit of $3.11 billion, compared with a year-earlier profit of $3.76 billion. Per-share earnings, reflecting the payment of preferred dividends in the prior-year period, declined to 29 cents from 35 cents a year earlier.

The Fairfield, Conn., company’s operating earnings, which exclude pension costs, rose to 38 cents from 34 cents a year ago, slightly topping the 37-cent estimate of analysts polled by Thomson Reuters.

Revenue climbed 2.5% to $36.5 billion. Analysts expected $36.8 billion.

Before the report, analysts at J.P. Morgan said GE would see orders fall for its wind business, since U.S. customers have already booked most of their turbine orders. It also noted that a big air show wouldn’t occur until the third quarter, hurting results from the conglomerate’s aviation business.

GE said its infrastructure orders were $23.1 billion, down 1%, primarily driven by a 37% decrease in orders for wind turbines. However, orders were up 8% on a year-to-date basis.

The company said revenue from its industrial businesses, which include energy-infrastructure and aviation, rose to $25.04 billion in the second quarter, an 8.8% jump. Profit from the businesses was up 6.8% to $3.74 billion.

GE has worked since the financial crisis to slim down its lending unit, GE Capital, by selling assets and allowing its loan portfolio to shrink. In June, The Wall Street Journal said top executives are looking at going further, including possibly selling businesses in GE Capital’s consumer-finance portfolio, such as private-label credit cards or showroom financing for products like snowblowers or lawn mowers.

Revenue from GE Capital fell 7.9% to $11.46 billion, while profit rose 31% to $2.12 billion.

URL to article:  https://www.wind-watch.org/news/2012/07/20/wind-turbine-decline-dents-ge-profit/