New York - General Electric's shift back to its manufacturing roots is paying off.
The conglomerate founded by light bulb inventor Thomas Edison has pumped billions of dollars into new energy-related businesses during the past few years while selling its stake in NBC, commercial real estate and other businesses. The move has softened the blow from the recession, and it expects double-digit earnings growth this year.
GE said Friday that net income fell 16 percent in the second quarter, mainly due to lingering charges from financing companies that were sold off four years ago. Its energy infrastructure business, meanwhile, reported double-digit growth in the period, and profits surged for its transportation business. The company's quarterly results topped Wall Street expectations.
GE is wading through "a still volatile global economy," CEO Jeff Immelt said. But its core businesses are growing profits, and "we ended the quarter with a record backlog."
Shares rose 35 cents, or 1.8 percent, to $20.15 in midday trading. That approaches its 52-week high of $21 per share.
The industrial and financial giant posted net income of $3.11 billion, or 29 cents per share, in the April-June period. That compares with $3.69 billion, or 35 cents per share, a year earlier. Excluding pension costs and losses from discontinued businesses, GE earned 38 cents per share, a penny above analysts' average expectations of 37 cents per share.
Revenue rose 2 percent to $36.5 billion, led by strong results in GE's industrial business. Analysts expected slightly higher revenue of $36.77
billion, according to FactSet.
GE said its net income was weighed down in the quarter by a number of charges that had little to do with its core businesses. GE booked a $553 million charge related to the 2008 sale of its WMC Mortgage Corp. and its consumer finance business in Japan. GE also adjusted its pension costs higher.
Meanwhile, its energy infrastructure and GE Capital businesses reported higher profits in the period.
GE Capital, the company's lending arm, increased profits 31 percent.