General Electric, one of the world's most diversified companies, has reported its biggest quarter of growth for 18 months as profits rose by 24% in the second quarter of 2005.
GE, which splits its business into 11 divisions, enjoyed strong results in traditional areas such as energy and industrial equipment. The company’s recently reorganized GE Consumer Finance division also made a significant contribution.
Earnings were a record $4.6 billion, up 24% from last year’s $3.8 billion. Earnings per share grew 22% to $0.44, compared with $0.36 in 2004. All 11 GE businesses contributed at least double-digit earnings growth. Operating profit margin of 15.1% increased 1.6 percentage points over second quarter 2004.
Revenues of $41.6 billion increased 13% from last year’s $36.8 billion. Industrial sales increased 12% to $22.4 billion, reflecting the impact of acquisitions and solid organic growth. Financial services revenues of $19.0 billion were up 12% over last year.
GE is in tremendous shape, chief executive officer Jeffrey Immelt said. GE is a strong and consistent growth company with expanding returns and strong cash flow. We are in the right businesses, benefiting from above-average market growth, and we are now organized to serve our customers with a deep and focused team. I’m very proud of our team’s performance. We are confident in our ability to deliver sustainable growth for our investors.
Following the pleasing results, GE has restated its 2005 earnings outlook toward the high end of its previous estimate. The company now expects to earn between $1.80 and $1.83 per share.