GE profits fall 49 percent

[July 17, 2009]  CHARLOTTE, N.C. (AP) -- General Electric Co. said Friday its second quarter net income tumbled 49 percent on continued woes of its finance unit and ongoing weakness in its big industrial units due to the recession.

But the earnings results surpassed Wall Street expectations and GE said its big GE Capital lending unit is on track to post a profit this year. It's a possible sign the conglomerate has achieved some stability following financial turmoil earlier this year.

GE, which makes products ranging from microwaves to wind turbines, reported net income was $2.6 billion, or 24 cents per share, after paying preferred dividends. That compared with $5 billion, or 51 cents per share, a year earlier.

It says revenue fell 17 percent to $39.1 billion, coming up short of analyst forecasts.

Analysts polled by Thomson Reuters expected the Fairfield, Conn.-based company to earn 23 cents per share on revenue of $42.16 billion.

GE Capital, which lends money on everything credit cards to commercial real estate, posted a modest profit of $590 million. But those results were still 80 percent lower than a year ago, further proof of GE Capital's struggles with mounting losses on its bad loans during the financial crisis.

GE's industrial units have also suffered. GE said its second-quarter sales fell 7 percent to $26 billion, a decline led by home appliances, train locomotives and diagnostic equipment for hospitals.

The only unit to post higher profits was GE's energy infrastructure segment, which makes products like pipeline equipment and wind turbines. GE said the 13 percent increase there was due to pricing and cost moves.

The conglomerate's NBC Universal entertainment division, which includes the NBC television networks, saw profits fall 41 percent on weak television advertising.

Despite GE's problems, company officials say there have been some signs of stability recently. GE has already met its goal of raising $45 billion from debt sales this year and pre-funded some of its planned debt issuance for next year. That's an indication that credit markets may be regaining some of their vigor. GE's share prices have also recovered.

[Associated Press; By STEPHEN MANNING]

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