FAIRFIELD, Conn., Fri Apr 20, 2012 – General Electric Co. topped Wall Street’s profit and revenue forecasts for the first quarter, helped by strong demand for energy equipment and railroad locomotives.
The largest U.S. conglomerate said industrial orders had risen 20 percent in the quarter and that selling prices had improved in most of businesses. This should help CEO Jeff Immelt achieve his goal of boosting profit margins by a 0.5 percentage point this year.
“We witnessed broad-based strength in orders across all our infrastructure businesses and in both equipment and services,” Immelt said in a statement.
GE shares rose 0.9 percent to $19.31 in premarket trading.
Investors noted that the company had notched solid organic growth — a measure that factors out the influence of acquisitions or fluctuations in exchange rates.
“Organic revenue growth in the industrial business was great at 11 percent,” said Jack De Gan, chief investment officer of Harbor Advisory Corp., a Portsmouth, New Hampshire, firm that owns GE shares. “GE has been a disappointment for a long time … (and) is now finally going to get back to where its earnings can compound at a rate better than the S&P for a while.”
As of Thursday’s close, GE shares were up 6.6 percent for the past year, trailing the 10 percent rise of the Standard & Poor’s 500 stock index.
Investors said the report was a good sign for the rest of the industrial sector. Fellow blue-chip companies United Technologies Corp., 3M Co. and Caterpillar Inc. are all due to report results next week.
GE “beat on revenues, which they haven’t really been able to do in a long time, and that really bodes well for industrials in particular,” said Kim Forrest, senior equity research analyst of Fort Pitt Capital Group in Pittsburgh.