General Electric Company (GE) notched a better-than-expected 21.6 per cent rise in earnings, helped by strong demand for jet engines as well as equipment used in oil and natural gas production.

The largest US conglomerate yesterday said its second-quarter results were helped by a rebound in sales of railroad locomotives, which offset weakening demand for wind turbines, said a report in our sister publication, the Gulf Daily News.

With overall orders up 24 per cent, pushing the company's backlog to $189 billion, chief executive Jeffrey Immelt said he was confident about the rest of the year.

"We are optimistic about our growth prospects in the second half and beyond," Immelt said.

The company's industrial revenues outside the US were up 23 per cent in the quarter, outperforming the overall company, which recorded a 7 per cent rise in sales from continuing operations.

Investors said the results showed the Fairfield, Connecticut-based company's focus on emerging markets was paying off.

"GE's strategy of growth in developing nations and energy and infrastructure and healthcare and technology is serving it well," said Perry Adams, vice-president and senior portfolio manager at Huntington Private Financial Group, which holds GE shares.

The rise in orders is a key sign that GE will be able to continue its pace of growth, said William Blair & Company analyst Nick Heymann.

"That's the path back to the future," he said.

Over the past year, GE shares have risen 26 per cent, ahead of the 23 per cent rise in the Dow Jones industrial average.

The world's largest maker of jet engines and electric turbines said second-quarter profit attributable to common shareholders rose to $3.69bn, or 35 cents per share, from $3.03bn, or 28 cents per share, a year earlier.

Factoring out one-time items, profit was 34 cents per share. On that basis, analysts had expected 32 cents. Revenue fell 3.5 per cent to $35.63bn, reflecting the sale of a majority stake in GE's NBC Universal business to Comcast Corporation.

Analysts had expected $34.7bn.

Profit fell 19 per cent at GE's energy unit, which incurred large costs to integrate the $11bn wave of takeovers it made between September and March. Profit margins on renewable energy equipment deteriorated.

Demand was split, with sales of equipment used in oil and natural gas production up 39 per cent, and electricity-producing gear up just 1 per cent.

"If oil keeps going up and if Congress and the president do something more on renewables, which they keep talking about but haven't done, then margins have a long way to expand," said Harbour Advisory Corporation chief investment officer Jack De Gan. "They're doing well to keep margins in those businesses as good as they are." – TradeArabia News Service