http://www.nytimes.com/2014/10/18/business/ge-profit-rises-11-in-third-quarter.html 2014-10-17 14:49:21 G.E. Profit Rises 11% in Third Quarter The results of the company’s strategy of shedding businesses were mixed: Earnings slightly exceeded Wall Street’s expectations, but revenue was a bit below. === General Electric The question now is how well the industrial engine driving the company will perform, particularly as the global economy looks increasingly shaky. G.E., the largest industrial company in the United States, The company reported net profit of $3.5 billion, an 11 percent increase from the year-earlier quarter. Its operating earnings from continuing operations, which exclude the impact from operations sold off or closed down, per share rose 6 percent, to 38 cents a share. That was slightly ahead of the average estimate of securities analysts of 37 cents a share, as compiled by Thomson Reuters. G.E.'s revenue across the corporation rose 1 percent, to $36.2 billion, from $35.7 billion last year. That was below the $36.8 billion forecast by Wall Street analysts. In a statement, “The environment is volatile,” Mr. Immelt said, “but infrastructure growth opportunities exist, and G.E. is executing well. The quarterly results do reflect the company’s continuing tilt toward industrial businesses since the financial crisis hit in 2008. Since then, G.E. has increased its investment in industrial products like oil field machinery, power generators, jet engines and medical imaging equipment, while paring back its big finance arm, In the quarter, revenue from the industrial businesses grew 4 percent, excluding the contribution from acquisitions. GE Capital’s revenue declined 1 percent. Before the financial crisis, GE Capital routinely accounted for more than half of the corporation’s profit. G.E.'s management has said that its goal is to reduce the share of its earnings that come from the finance unit to a consistent 25 percent by 2016. The company seems to be well ahead of schedule, at least for a quarter, with the industrial business accounting for just under 75 percent of operating profits in the third quarter. The oil and gas unit, in particular, has been built up in recent years. This year, according to Bernstein Research, that business will contribute $19.5 billion in revenue, or 18 percent of G.E.'s industrial revenue. A decade earlier, the oil and gas share was 4 percent. With oil prices falling, spending plans for heavy equipment in the Across its industrial lines, G.E. has streamlined its operations to reduce expenses, analysts say. If sales of new industrial equipment lag, the company, will rely on pulling more profit from its $250 billion backlog of orders for equipment and services, analysts note. A crucial tactic in the G.E. game plan, said Brian K. Langenberg, an independent analyst, is to “take cost out to capture higher profit margins in their huge backlog of business.”