Friends in High Places | GE Profits Soar Coincidentally After Obama Appointment

GE’s Profit Jumps 77%


Bob Sechler|Wall Street Journal

Big Boost: Since G.E. CEO Jeffrey Immelt's appointment to Obama's Council on Jobs and Competitiveness,GE's profits are soaring.

General Electric Co. reported a 77% increase in first-quarter earnings, lifted by marked improvement at its GE Capital financing arm and gains at most of its industrial units.

The company also boosted its quarterly dividend by a penny to 15 cents. The move marks GE’s third dividend increase in the past year, although the payout remains well short of GE’s 31-cent dividend before the financial crisis and economic downturn.

“Our environment continues to improve and get better,” said Chairman and Chief Executive Jeff Immelt on a call with analysts, noting that the restructuring of GE Capital was ahead of plan while the quarter saw record orders for its industrial unit.

Mr. Immelt also said the company was done with major acquisitions after spending $11 billion to expand its energy unit.

GE shares were up 2.2% to $20.85 in premarket activity. The stock has risen 12% year-to-date through Wednesday, with GE’s strong first-quarter results following a fourth-quarter report in January that showed substantial evidence of a turnaround.

Mr. Immelt reiterated confidence that the Fairfield, Conn., company will achieve goals laid out in its 2011 financial framework, which among other things calls for about 5% revenue growth in GE’s industrial businesses. GE has been relying on its industrial units to fuel its long-term prospects as it moves to shrink GE Capital, which once accounted for half the conglomerate’s profit but became a severe drag during the financial crisis.

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GE Profits Soar Coincidentally After Obama Appointment