GE Q4 profit tops Street view, order backlog up
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General Electric Co reported a better-than-expected 7.5 per cent rise in fourth quarter profit and a sharp increase in its backlog of equipment orders, sending its shares higher.
GE, the largest US conglomerate, notched strong earnings growth at units that make jet engines and equipment used in oil and gas production, with results benefiting from CEO Jeff Immelt's efforts to boost its presence in the energy industry in recent years. The order backlog, watched by investors as an important indicator of future sales growth, hit a record high $210 billion in the fourth quarter, up from $203 billion in Q3.
"The backlog was a really good number. I didn't expect to see a $7 billion, 3.5 per cent rise in the backlog," said Jack De Gan, chief investment officer at Harbor Advisory Corp, which holds GE shares. "Orders in the fourth quarter must have been really good for the industrial side."
Orders were up 2 per cent, and would have been up 7 per cent without a sharp drop in demand for wind turbines related to the expected expiration of a tax credit.
GE shares were up 3 per cent to $21.94 in early Friday afternoon trading on the NYSE. Solid demand in China and oil-producing countries helped to offset unsteady economies at home and in Europe, Immelt said.
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