General Electric Co. posted a 19% slump in fourth-quarter profit, dinged again by weakness at its finance arm and NBC Universal, but offered an upbeat outlook that foresees a return to growth in 2011.
Orders have improved since its investor update in December, with delinquencies in its problematic finance unit also trending down, though commercial real-estate remains a key concern.
"The world we look at really has improved," Chairman and CEO Jeff Immelt said on a conference call with analysts.
Net profits for the December quarter came in at $3.01 billion U.S., or 28 cents U.S. a share, compared with year-earlier earnings of $3.72 billion U.S., or 35 cents U.S. a share, and the consensus forecast among analysts of 26 cents U.S. a share. Revenue dropped 10% to $41.44 billion U.S..
GE shares rose more than 4% premarket.
"We saw pretty good order strength in the fourth quarter," Mr. Immelt said, forecasting a year-on-year gain in equipment deals in 2010.
New orders for big-ticket equipment and services were $22.1 billion U.S. in the final quarter, down 3% from a year earlier but up from $18.4 billion U.S. in the third quarter of 2009 and from $18 billion U.S. in the second quarter.
Mr. Immelt previously has called the second quarter the potential low point for new orders amid the economic downturn.
GE has continued to generate substantial cash, which is being used to restructure the GE Capital unit, though analysts expect the company to seek deals in infrastructure, now its most profitable segment.
Earnings at GE Capital fell 67% in the fourth quarter, though all segments bar commercial real-estate were profitable. The property unit's losses are expected to rise this year.
Mr. Immelt said the Fairfield, Conn., conglomerate is on track to achieve the broad financial forecast it unveiled last month, with flat overall 2010 results followed by "solid growth" in 2011.
Any restoration of last year's historic dividend cut hinges on improved profitability, though the company also sees opportunities for share buybacks.
The company has been working toward going back to its industrial roots, highlighted by its recent deal to sell a majority stake in NBC Universal to Comcast Corp. NBC Universal saw a 30% drop in profit drop as revenue fell 4%.
Profits from the energy infrastructure unit climbed 9%, even as its technology infrastructure segment posted a 16% drop in profit. Earnings at the company's commercial and industrial division, meanwhile, more than tripled, to $136 million U.S.
GE said its backlog of orders for new equipment and services stood at $175 billion U.S. at the end of the fourth quarter, up from $174 billion U.S. in the third quarter and a company record.
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