GE profit up 18pc, driven by foreign growth

BOSTON, Oct 22 (Reuters): General Electric Co reported an 18-per cent profit rise that met Wall Street's expectations, helped by strong revenue growth in key foreign markets including Brazil, Russia and China. The largest US conglomerate said Friday it expects earnings to rise at a double-digit percentage rate next year, following peer United Technologies Corp in trying to assuage investors' fears about Europe's brewing debt crisis. "We continue to successfully navigate a volatile global economy," Chief Executive Jeff Immelt said in a statement. Investors took heart in the company's 16 per cent growth in industrial equipment orders -- an important indicator of future revenue, and in the 25 per cent rise in international sales. GE has been counting on strong demand in rapidly developing economies to offset weak US and European demand. "They can see enough of their industrial sales coming out of orders and backlog that they can say that with some comfort," said Jack De Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire. "The revenue number was strong and the organic growth rate in industrial was strong. Those are telling and they give us a little bit of a look into next quarter and beyond." The report comes amid a wave of generally strong earnings reports from big US manufacturers. Also Friday, Honeywell International Inc reported a 45-per cent profit rise. Fellow blue chips Caterpillar Inc and 3M Co will report next week. Still, investors remain concerned whether Europe's crisis could drag down global demand by shaking the financial system. "Possible concerns going forward are going to be related to Europe and what impact that may have, not just there but on global growth in general," said Perry Adams, vice president and senior portfolio manager at Huntington Private Financial Group in Traverse City, Michigan. "There's elevated uncertainty." GE shares moved little in premarket trading, down 12 cents at $16.51. The world's biggest maker of jet engines and electric turbines reported third-quarter earnings attributable to common shareholders of $2.34 billion, or 22 cents per share, compared with $1.98 billion, or 18 cents per share, a year earlier. The results included an 8-cent-per-share charge to buy back the preferred shares the company had sold to Warren Buffett's Berkshire Hathaway Inc during the financial crisis. Buying back the Buffett stake, which carried a preferred dividend, will boost GE's annual earnings by 3 cents per share in the coming years.