GE and other US giants see growth ahead
US industrial giant General Electric reported higher earnings for the third quarter Friday and said global economic growth remains solid, if uneven, with the US especially strong.
GE chief executive Jeff Immelt said the company has seen a mix of conditions in different markets, with the US clearly picking up. "It fits a pattern that we have seen the last couple years, and the underlying activity is still reasonably healthy, but not universal," Immelt said.
GE's view was echoed by fellow US industrial conglomerate Honeywell International and by oil-services giant Schlumberger, both of which also cited slow growth as they reported strong earnings.
Shares of all three companies rose decisively, helping to lift US equity markets following deep drops earlier in the week.
GE, often seen as a proxy of the broader economy because of its wide range of businesses, said net income rose 10.8 percent to $3.5 billion behind especially strong increases in its aviation and oil and gas divisions.
GE notched revenue gains in five of seven industrial segments, with the transportation segment leading the way with a 10 percent gain.
Among the larger industrial divisions, the strongest profit gains came in oil and gas (+27.2 percent) and aviation (+15.9 percent). Profits fell 7.6 percent in power and water.
Immelt described the environment as "volatile," but gave a generally optimistic outlook when asked on an analyst call this week's gyrations in financial markets.
"The US is probably the best we have seen it since the financial crisis," Immelt said.
Immelt said Europe is "slower," the Middle East-North Africa remain robust, while China is uneven, with aviation and health care much stronger than other segments.
"So if you look at it geographically, I think it is this slow growth pattern with volatility, but not a lot different than what we have seen in the past," Immelt said.
Schlumberger, which operates in all major petroleum centers, said it continues to believe the "slow but steady economic recovery in the world economy is intact."
Net income for the third quarter rose 13.6 percent to $1.9 billion behind an especially strong performance in North America.
The company has also seen growing activity in Latin America, increases in key regions of Sub-Saharan Africa and "solid" results in the Middle East.
On the downside, revenue growth in Russia was limited by European sanctions on the big petroleum producer, while unrest in Kurdistan resulted in a "severe slowdown" in the country.
Oil prices have fallen more than 20 percent since June on worries of a crude glut, but Schlumberger said it still sees the oil market as "relatively well-balanced."
Honeywell, which provides sensors, process controls and other goods to numerous industrial sectors, lifted its 2014 forecast following better-than-expected earnings.
Earnings for the third quarter rose 17.9 percent to $1.2 billion as the company said it again expected "a slow growth macro environment" in 2015.
At midday, shares of Dow member GE rose 3.6 percent to $25.12, Schlumberger gained 5.4 percent to $95.54 and Honeywell advanced 3.8 percent to $89.66.