General Electric announced an increased fourth quarter profit aided by sharp backlog activity. Profit has increased 7.5% over the same quarter last year. Business units that manufacture jet engines, along with equipment used for oil and gas production, generated significant profits. The conglomerate’s presence within the energy industry has grown substantially under the guidance of Jeffrey R. Immelt, Chairman of the Board and Chief Executive Officer.
The companies order backlog climbed from $203 billion in the third quarter to $210 billion in the fourth, marking a record high. Jack De Gan, chief investment officer at Harbor Advisory Corporation said, “The backlog was a really good number. I didn’t expect to see a $7 billion, 3.5% rise in the backlog. Orders in the fourth quarter must have been really good for the industrial side.” Tax credit expirations held back potential profits by slowing wind turbines sales, allowing a rise of only 2%.
Fourth quarter earnings increased compared to the previous year. The $4.01 billion or$0.38 per share in fourth quarter earnings passed the $3.73 billion or $0.35 per share earned last year. Profits stayed ahead of analyst estimates by a penny. After factoring out one-time items, profits were $0.44 a share, according to Thomson Reuters.
G.E. Capital finance division contributed a 6% increase. The G.E. Oil and Gas division rose 14% and the jet engine unit posted an impressive 22% growth. G.E.’s ability to expand its equipment and product lines focusing on natural gas, mining, medical equipment, gas and oil production has helped the company become a force in the energy industry.
With years of growth behind the company, Mr. Immelt plans to make 2013 even better through raising operation profit to 15.8% of sales by end of year. G.E.’s innovative business model allows them to meet the needs of prospective and current customers along with challenging the assumptions of their competitors.