GE Profit Tops Analysts’ Estimates, Shares Climb

General Electric Co. continued to show steady improvement in the fourth quarter, beating Wall Street’s expectations for sales and profit on the back of cost cutting and a strong infrastructure business.

Though overall revenue and earnings fell year-over-year, sales and profit rose in every segment compared to the prior quarter, except for GE’s struggling NBC Universal unit. Finance unit GE Capital continued to rebound, posting a profit in every segment except for mortgage lending for the second-straight quarter.

“GE’s environment has improved and we saw some encouraging signs at year-end,” said GE Chief Executive Jeff Immelt in a statement, noting that the company’s cost-cutting contributed heavily to its stabilization.

“We continue to operate the company with discipline,” said Immelt, adding that the company anticipates “solid growth in 2011 and beyond.”

The Fairfield, Conn.-based conglomerate said its fourth-quarter net income fell 19% to $3 billion, or 28 cents per share, for the period ended Dec. 31.

Results included a one-time charge of 9 cents per share for restructuring and cost-cutting and a gain of 6 cents a shares for tax-related benefits. Without the charge and benefits, GE (GE, Fortune 500) earned 31 cents per share. Analysts polled by Thomson Reuters, who typically exclude one-time items from their estimates, forecasted earnings of 26 cents per share.{loadposition in-article}

Sales fell 10% to $41.4 billion, topping analysts’ forecasts of $40 billion.

Steady improvement

Sales dropped in all of the company’s segments last quarter, but cost-cutting initiatives managed to buoy profits in some units. Compared to the third quarter, all GE units posted steady improvement in sales and nearly all segments grew their profits.

The notable exception was NBC Universal. On a year-over-year basis, revenue fell just 4% but profit tumbled 30%. Compared to the prior quarter, revenue was up 5% but profit was still down a whopping 18%.

Sales from the energy infrastructure unit fell 9%, but earnings were up 9% compared to a year ago. At the consumer and industrial division, sales fell 8% but profit rose nearly 278%.

The technology infrastructure unit had falling revenue and profit last quarter. Sales at the division were down 10% and earnings fell 16%. Still, compared to the prior quarter, both profit and sales were up by double digits.

GE Capital

Revenue from the company’s finance arm fell 15% to $12.5 billion in the quarter, accounting for more than a third of GE’s overall revenue.

The unit was again profitable in the fourth quarter, earning $336 million. That was down 67% from the same period last year but up 28% from the previous quarter.

Immelt reiterated in a statement that the company’s finance division has become “safer and more focused.”

The company’s infrastructure and consumer businesses fared very well in 2009 despite the turbulent economy. But much of the company has been rocked by the downturn, dragged by a significant drop in profit and revenue at GE Capital and NBC.

GE sees hope for the future. The conglomerate is in the process of selling its majority stake in NBC to cable provider Comcast (CMCSA, Fortune 500), and it completed its long-term funding plan for GE Capital a year ahead of schedule.

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