General Electric Touts Record Order Backlog in Second-Quarter 2012, Sees Solid Growth Abroad

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Researched by Industrial Info Resources (Sugar Land, Texas)--Executives at power and manufacturing titan General Electric Company (NYSE:GE) (GE) (Fairfield, Connecticut) maintained a positive outlook despite a dip in profits, as the company's industrial growth markets saw a 17% increase in revenues and a 14% increase in orders. GE also reported a record backlog of orders at the end of the period. Net earnings for the quarter were reported to be $3.11 billion, a 15.83% decrease from second-quarter 2011.

GE reported total revenues of $36.5 billion, a 2.46% increase from the same period last year. The company reported double-digit growth in international markets, including Latin American, China, Canada, Australia, Russia, Southeast Asia and the Middle East/North Africa region. The Aviation and Transportation segments saw stronger orders, up 5% and 2%, respectively. Among the most negative factors for the quarter was a 37% decrease in wind turbine orders, which caused infrastructure orders to decline 1%, and a $900 million loss in revenues due to foreign exchange losses and continuing shrinkage in the GE Capital segment.

Industrial Info is tracking more than $7.3 billion in active projects involving GE, including a $314.2 million, Phase I addition to a chlorine plant in Runcorn, England, and $37 million in additions and upgrades at a railroad parts manufacturing plant in Grove City, Pennsylvania. The Runcorn project involves constructing two grate-fired boilers to burn 400,000 tons per year of municipal solid waste to supply the 36-megawatt renewable energy addition, as well as about 70 tons per hour of steam to a chemical plant onsite. Some infrastructure for Phase II also will be constructed. The Grove City project involves installing and upgrading production and supporting equipment at the 40-year-old plant to manufacture, assemble and remanufacture rail and other transportation-related products.

"Orders pricing was a highlight, with four or five businesses growing, and we continue to build backlog," said Jeff Immelt, the chairman and chief executive officer of GE, in a conference call. "Europe remains weak, particularly in service. Our orders positions today supports our growth plans for the future."

The Transportation segment saw the strongest percentage gains in revenues and profits for the quarter, while GE Capital was the only major segment to see a revenue decline:

• The Energy Infrastructure segment reported $11.92 billion in revenues for the quarter, an 14.58% increase from second-quarter 2011, and $1.76 billion in profits, a 13.08% increase.
• The Aviation segment reported $4.86 billion in revenues for the quarter, a 2.6% increase from the same period last year, and $922 million in profits, a 3.86% decrease.
• The Health Care segment reported $4.5 billion in revenues for the quarter, basically the same amount as in second-quarter 2011, and $694 million in profits, a 2.39% decrease.
• The Transportation segment reported $1.57 billion in revenues for the quarter, a 27.13% increase from the same period last year, and $282 million in profits, a 57.43% increase.
• The Home & Business Solutions segment reported $2.2 billion in revenues for the quarter, a 2.37% increase from second-quarter 2011, and $91 million in profits, a 14.15% decrease.
• The GE Capital segment reported $11.46 billion in revenues for the quarter, a 7.89% decrease from the same period last year, and $2.12 billion in profits, a 31.39% increase.

GE executive expressed confidence in the recent boom in orders. Among the most important is an order for Australia's Ichthys liquefied natural gas (LNG) project, which called for five heat recovery generators, five Frame 6B gas turbines, and three SC4 single-flow steam turbines. These additions will help the Ichthys project produce more than 8 million tons of LNG annually. The Transportation segment also received a significant boost, with orders for 176 locomotives from North American railway customers.

"Margins are improving, and we're on track for margin growth, starting in the third quarter, and for [full-year] 2012 and 2012," Immelt said in the conference call.

For more information, visit Industrial Info's North American Power Project Database.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.