General Electric released its profits report Friday that showed better than expected increase of 7.5 percent in its fourth quarter profit as well as a sharp increase in its backlog of equipment orders. GE got strong earnings growth at units that make equipment used in oil and gas; and jet engines.
Chief executive Jeffrey R. Immelt said that the company worked hard to expand its presence in the energy industry in recent years. The order backlog is seen by investors as a vital sign of future sales growth. It hit a record high $210 billion in the last quarter of 2012 compared to $203 billion in the third quarter.
Orders increased 2 percent and would have been up 7 percent if the drop in demand for wind turbines connected to the expected expiration of a tax credit was excluded. The unsteady economy in the US was offset by solid demand in China and other oil producing countries.
GE is one of the world’s biggest manufacturers of jet engines and electric turbines. It reported that its fourth quarter earnings increased to $4.01 billion or 38 cents per share compared with $3.73 billion or 35 cents per share a year ago.
Excluding one-time items, profit was 44 cents per share, which is a penny above analysts’ estimates. Revenue increased 3.6 percent to $39.33 billion from $37.97 billion the previous year. Analysts expected revenues to be $38.76 billion.
Profit went up in all divisions. The jet engine unit got 22 percent growth. GE Oil and Gas, which makes equipment for energy production, gained 14 percent. GE Capital finance arm’s profit increased 6 percent.
Over the last few years, GE improved its position in the energy industry. It widened its lineup of equipment used in gas and oil production as it capitalizes on the surging natural gas production in the United States.