July 20 (Bloomberg) -- General Electric Co. earnings climbed 7 percent in the second quarter as profit growth at the finance and energy units overcame a drop in wind-turbine orders.
Earnings from continuing operations rose to $4.01 billion, or 38 cents a share, Fairfield, Connecticut-based GE said today in a statement. Revenue climbed 2 percent to $36.5 billion, trailing analysts’ estimates of $36.8 billion.
GE is benefiting from Chief Executive Officer Jeffrey Immelt’s efforts to boost industrial earnings while shrinking the finance arm after about $32 billion of credit losses in the financial crisis. GE Capital profit rose to $2.12 billion, a 31 percent gain, as energy earnings climbed 13 percent even amid lower wind-turbine demand.
“Between finance and energy, those two provide such a big proportion of the earnings power of the company and they’re the ones that matter, with everything else mostly just details,” Brian Langenberg, principal and director of research at Langenberg & Co., said in a telephone interview before results were announced.
GE Capital paid a $3 billion dividend to its parent company. It resumed the payouts in May after the Federal Reserve concluded its assessment of the business.
The industrial division’s order backlog climbed to a record $204 billion from $201 billion in the three months through March, GE said.
“We are executing on our growth strategy in the midst of a still volatile global economy,” Immelt said in the statement.
GE climbed 1 percent to $20 at 9:04 a.m., before the start of regular trading in New York, even amid a decline for the broader Standard & Poor’s 500 Index and Dow Jones Industrial Average.
Industrial orders fell 1 percent in the quarter as demand for wind turbines plummeted 37 percent ahead of the scheduled expiration of a U.S. power-production tax credit later this year.
GE said separately it would divide its energy business, which has about 100,000 employees and makes up about 30 percent of sales, into three separate units. Vice Chairman John Krenicki, who headed the energy business, will leave at the end of 2012 and the chiefs of the three new units will report directly to Immelt.
“We had kind of a $50 billion company within a company,” after making $11 billion in energy acquisitions through 2011, Immelt said on an earnings call. “The idea to get a little bit faster and more focused on those businesses seemed to be a logical position.”
Profit declined at the health-care business and the aviation unit, which makes jet engines for airplanes. In the transportation division, which builds diesel locomotives, earnings climbed 58 percent to $282 million.
Adjusted profit of 38 cents a share topped the 37-cent average estimate from analysts. Accounting for charges including $553 million, or 5 cents a share, from discontinued operations such as its WMC mortgage business sold in 2007, net income declined 18 percent to $3.11 billion, or 29 cents a share, from $3.76 billion, or 35 cents.