General Electric Co posted better-than-expected quarterly profit,as a strong performance at its large energy operation offset declines at the GE Capital finance and NBC Universal units. Its shares,which have been beaten down over the past year,rose 3.5 percent in premarket trading and investors said the 36 percent drop in profit could be a sign that the current recession is approaching its nadir. The numbers are showing stabilization in the global economy and in the performance of GE stock, said Jim Hardesty,president of Hardesty Capital Management in Baltimore,which owns GE shares. The result still wasn't good,though. The largest US conglomerate said its order backlog a key indicator for sales of electricity-producing turbines,jet engines and other heavy equipment held steady at $171 billion and that its finance arm was on track for a profitable year. GE is viewed as a barometer of the economy due to the size and breadth of its operations. The Fairfield,Connecticut-based company plans to cut its costs by more than $5 billion this year. GEs net income attributable to common shareholders fell 36 per cent to $2.74 billion,or 26 cents per diluted share,down from $4.3 billion,or 43 cents per diluted share a year earlier. Analysts,on average,looked for profit of 21 cents per share,according to Reuters Estimates. Revenue fell 9 per cent to $38.41 billion. Its order backlog remained stable at $171 billion. Profit at GE Capital the companys primary weak spot fell 58 per cent to $1.12 billion. GEs Energy Infrastructure unit which makes products ranging from gas-fired turbines to solar panels notched a 19 per cent rise in profit,to $1.27 billion. Energy Infrastructure has been the backbone of growth for the company, said Daniel Holland,equity analyst at Morningstar in Chicago. Looking at the demand for gas turbines and the fact that we have a good incentive plan for renewable energy in place now,that should keep growth going pretty strong there. Profit at the NBC Universal media business fell 45 percent to $391 million on a 2 percent drop in revenue. GE has ceased giving numeric per-share profit forecasts,instead providing investors with a framework of how it expects each of its business units to perform this year. That framework calls for profit to be flat to up 5 per cent at its infrastructure arms and flat to down slightly at NBC. In December,it forecast that GE Capital would earn about $5 billion this year,though last month it told investors that based on the Federal Reserves expectations for the US economy,the finance unit's profit could be half that. During the first quarter,GE cut its quarterly dividend by 68 per cent and was stripped of its top-tier "AAA" credit rating by both Moody's Investors Service and Standard & Poor's. Its shares were up 3.5 per cent to $12.70 in pre-market trading. As of Thursdays close,the shares are down approximately 63 per cent over the past 12 months,a far sharper drop than the 36 per cent fall of the Dow Jones industrial average. GE shares are now trading at more than double their 52-week low of $5.86 hit on March 4. Its not going to double again from here, said Edward Maraccini,portfolio manager at Optique Capital Management in Milwaukee,which owns GE shares. "But as long as we see stabilization in results and for the capital position to stop deteriorating,it can definitely start to build off a base.
