US conglomerate General Electric on Friday reported a robust jump in profits for the fourth quarter as it shifts focus back to its core industrial roots. GE, considered a bellwether of global industrial activity, posted net income of $5.15 billion for the October-December quarter, a gain of 61 percent from a year ago. The company said revenues were up 4.0 percent at $42.0 billion, and maintained its outlook for 2015 growth of 2-5 percent in its industrial businesses.
"GE ended the year with strong fourth-quarter industrial earnings and margin growth. The environment remains volatile, but we continue to see infrastructure growth opportunities," said Jeffrey Immelt, GE chairman and chief executive. The company said the company ended the quarter with a backlog of orders of $261 billion, up from $244 billion a year ago.
Operating earnings per share, which are closely tracked by Wall Street, hit 56 cents, a penny more than analysts expected. That was 5.7 percent higher than in the 2013 fourth quarter. For the 2014 full year, GE posted net income of $15.2 billion, a 16.7 percent increase from 2013. Full-year revenues of $148.6 billion were up 1.7 percent from a year ago but slightly below analysts' $148.7 billion estimate.
Shares in Dow member GE were up 0.5 percent at $24.40 in early trade on the New York Stock Exchange. Immelt said that GE expected to hit its target of reaping 75 percent of its profits from the industrial segment by 2016, depending on the closing of deals that require regulatory approval. The Fairfield, Connecticut-based GE has been scaling back its financial division, GE Capital, spinning off the retail finance arm and renaming it Synchrony Financial, and selling GE Money Bank to Spain's Santander in November.
The sale of its appliances business to Electrolux of Sweden is expected to close this year. GE's 12.4 billion euros ($13.9 billion) deal to buy the energy assets of France's Alstom is a centerpiece of Immelt's strategy to boost its industrial operations.
Alstom shareholders approved the sale in December, but the transaction requires the approval of regulators in nearly two dozen countries. The US company snapped up the prize of Alstom's gas turbine unit - a large, lucrative business with long-term contracts and income stream that complements GE which is already the world leader in the sector. But it had to agree to a number of other deals in order to win over the French government.
GE also agreed to take on Alstom's nuclear, steam turbine, offshore wind and hydro power businesses, which it will run as 50-50 joint ventures with French shareholders including, most importantly, the government. And it will fold its electricity grid business into Alstom's, also to be run as a 50-50 joint venture. As part of the deal, GE will hand over its train signalling business to Alstom, whose high-speed rail sector, maker of France's famed TGV trains, will become its core business.