GE profit falls, meets estimates, sells loan unit

HARTFORD, Conn. -- Industrial and financial conglomerate General Electric Co. said Friday its profit fell 6 percent in the second quarter, and has agreed to sell its Japanese consumer finance business for $5.4 billion.

Fairfield-based GE earned $5.07 billion, or 51 cents per share, compared with a year-earlier profit of $5.38 billion, or 52 cents per share.

Revenue rose to $46.89 billion from $42.38 billion a year earlier.

On the basis of continuing operations, GE said it earned $5.39 billion, or 54 cents per share. Thomson Financial says analysts expected the company to report earnings of 54 cents per share on revenue of $45.31 billion.

"We believe we had a solid performance in a tough environment," GE Chief Executive Jeff Immelt told analysts in a conference call Friday.

Growth internationally is "offsetting a sluggish U.S. economy" and GE's long-term positioning outside the United States has shown benefits in the second quarter, he said.

Revenue rose 11 percent, but costs from sales, expenses and interest and other financial charges rose 15 percent, slicing into the conglomerate's quarterly profit.

GE said it had agreed to sell its Japanese consumer finance unit, which includes the Lake personal loan business, wholly owned credit cards and mortgages under GE Consumer Finance Co Ltd. and its subsidiaries, to Shinsei Bank, a midsize Japanese bank. The sale is expected to close in the next quarter.

"This transaction will allow us to redeploy our resources to faster growth and higher return opportunities," Immelt said Friday.

It's the most recent in a series of moves by GE to reshape its portfolio to focus on faster growth businesses. GE announced Thursday that it wants to spin off its lighting and appliance businesses.

Shares rose 37 cents at $28.01 in morning trading.

GE reaffirmed its full-year guidance of $2.20 to $2.30 per share, which is flat to an increase of 5 percent. Analysts surveyed by Thomson Financial expect full-year earnings of $2.22.

GE's infrastructure business, which manufactures big-ticket items such as locomotives and water treatment plants and is making major inroads in developing countries, turned in the greatest revenue and profit gains for the second quarter. Revenue for the quarter was $17.5 billion, up 26 percent. Profit rose by 24 percent, to $3.17 billion.