por Lynn Shapiro
, Writer | April 17, 2009
GE surprised investors Friday by posting earnings of 26 cents a share, beating Wall Street consensus estimates of 21 cents. GE rose 14 cents to $12.41 on a trading day in which S&P 500 and NYSE composites both rose marginally on better than expected news from GE and Citigroup.*
However GE profits were down considerably from last year's first quarter. GE's first quarter net income of $2.9 billion, dropped from $4.47 billion in the year earlier quarter. Revenue declined 9 percent to $38.41 billion.
Most of GE's businesses with the exception of energy, oil and gas, and aviation, posted a drop in earnings for the period ended March 31. GE Capital was down 23 percent; the healthcare business dropped 22 percent. NBC Universal earnings fell 45 percent, due to weakness at its theme parks and a drop of orders for DVDs.
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Meanwhile, GE's energy, oil and gas and aviation units reported double-digit profit growth. Stimulus infrastructure projects should help, but most of the benefits to GE won't be realized until 2010 or later, said chairman and CEO Jeffrey Immelt at a conference call with investors on Friday. Immelt estimates that GE could receive about $100 billion in business opportunities from government stimulus spending.
Immelt reiterated the fact that stress-test results given to financial institutions including GE Capital show that GE won't need to raise additional capital this year. Some results of the tests, showing whether banks need to boost their capital base, are due to be released by the government next month.
*Note: This report reflects later trading than the version filed Friday afternoon.