General Electric, viewed as a bellwether for the U.S. economy, on Oct. 10, announced that its third-quarter earnings plunged by 23% from a year ago to $4.3 billion.
GE's finance arm took a hit from the global credit crisis, while other operations managed to show profit growth despite economic and market turbulence.
The financial arm known as GE Capital earned a profit of $2.02 billion, but that was a 33% drop rom a year ago.
The overall results "are fully in line with guidance, and we have continued to take decisive steps to strengthen GE in a tough environment," said CEO Jeff Immelt said. Revenues for the period rose 11% to $47.2 billion, slightly below analyst forecasts.
GE has raised $15 billion in capital "that makes the company more secure in the short term, but could be used to play offense in the long term," Immelt said. Earlier this month, tycoon Warren Buffett agreed to invest $3 billion in GE, expressing confidence in the company's long-term outlook.
In July, GE announced a new "simplified" organizational structure around four core segments as it set the stage for a spinoff of its consumer and appliance businesses.
GE's divisions include Technology Infrastructure, which includes health care, aviation and transportation; and GE Energy Infrastructure, making generators, wind turbines and other equipment for the energy sector. GE also controls NBC Universal, the media-entertainment powerhouse that includes NBC television and Universal Pictures.
The energy division saw a 31% operating profit increase to $1.425 billion in the quarter as revenues grew 32%. The technologuy infrastructure division managed a 2% rise in operating earnings to $1.9 billion on a 9% revenue increase.
NBC Universal saw revenues grow 35% and operating profits up 10% to $645 million, helped by the Summer Olympics broadcasts by the NBC network.
Copyright Agence France-Presse, 2008
