General Electric is the archetypal multinational conglomerate, with customers in more than 100 countries and interests in a diverse field of technologies and services. The problem with this at the moment is that while the US economy is showing strength, the outlook for the rest of the world is less certain, with Europe still wobbling and China apparently slowing.
It’s promising, therefore, to hear from GE that is has seen signs of recovery in its main markets. The US was predictably strong, with orders rising 20%, but it is an optimistic sign that orders also increased in Europe (by 2%) and in China.
The company announced earnings of 36 cents per share, excluding items, which beat the 35 cents per share that had been expected by analysts. Revenues missed expectations though, coming at $35.1 billion, which is 4% lower than the equivalent period last year.
Second-quarter earnings were boosted by strength in GE’s aviation division, which saw profits rise 16% to $1.07bn. Power and water equipment was the most under-performing sector of the business, experiencing a 17% fall to $1.09 billion.
The company issued a rosy forecast for the full year, saying that it should accomplish revenue-growth of as much as 5% and high single-digit or low double-digit percentage growth in operating earnings.
GE has increased its profit margins through cost-saving exercises, and reports that it is on track to reduce $1 billion of costs this year.
Shares in GE had risen more than 5% by the last hour of trading in New York.