With the financial crisis in the rearview mirror, General Electric is getting back to its industrial roots.
The conglomerate said Friday that its profit had risen 5 percent in the fourth quarter, bolstered by growth in its industrial businesses and a gradually improving U.S. economy. The results reflected a focus on products like oil pumps, jet engines and home appliances and a move away from the risky financial activities that once got the company in trouble.
General Electric reported net earnings of $4.2 billion in the quarter, compared with $4.01 billion a year earlier. Excluding certain costs, the company had earnings of 53 cents a share, in line with the expectations of analysts polled by Thomson Reuters.
Backing that quarterly profit was revenue of $40.4 billion, an increase of 3 percent from the period a year earlier. The industrial businesses contributed $29.9 billion of revenue, as U.S. orders grew 8 percent. The situation was weaker in Europe, where orders grew by 3 percent.
GE ended the year with strong fourth-quarter earnings and margin growth in an improving but mixed environment, Jeffrey R. Immelt, the companys chairman and chief executive, said in a statement. We saw good conditions in growth markets, strength in the U.S., and a mixed environment in Europe.
GE has about 4,771 employees in North Carolina at a number of locations, including a manufacturing facility in Mebane, which makes lighting panels, power panels, switchgear and electrical vehicle charging stations, and a GE Aviation assembly plant in Durham.
In the years since the financial crisis, Immelt has sought to cut costs and refocus GE around its core industrial businesses. Last year, the company reduced its costs by $1.6 billion, increasing its operating profit margins, according to Fridays results.
The company experienced decent growth in some of its major industrial business lines. The oil and natural gas business, which sells pumps and other equipment, reported a 24 percent increase in profit for the quarter, while earnings in the aviation business, which sells jet engines, rose 20 percent. Overall, quarterly profit from the industrial businesses rose 12 percent.
The financial business, GE Capital, which was stung by aggressive lending during the crisis, showed evidence of its continuing transformation. For the fourth quarter, profit at GE Capital rose 38 percent, although revenue declined 5 percent in the quarter.
General Electric is focused on shrinking the division. Last year, the company took its Swiss consumer business public and plans to take its North American retail finance business public this year.
As it shifts its strategy, General Electric has been returning cash to shareholders, paying out $7.8 billion of dividends and buying back $10.4 billion of stock last year.
We end the year with momentum, Immelt said on a conference call with analysts Friday. We are quite confident in this operating framework for 2014.
GE shares fell 62 cents, or 2.3 percent, to close at $26.58 on Friday.