General Electric (NYSE: GE) posted modest earnings growth in the second quarter on lower revenues, reflecting slow improvement in the global economy. GE’s industrial segment margins for the quarter were up by 50 basis points, and the company has an orders backlog of $223 billion, but among the sectors mentioned in an earnings call as dragging down strong advances in other parts of the business, lighting and wind turbines led the way.
"Our organic growth was down 1% for the quarter but it's really a wind turbine story," said GE Chairman Jeffrey Immelt in a conference call with analysts following the earnings report, available on Seeking Alpha. The company shipped 351 wind turbines versus 726 in the same period last year. “The wind turbine cycle is a headwind, but we're well positioned for the future with a solid backlog and the balance of our industrial businesses should grow in line with our 5% to 10% organic growth goal,” Immelt added later in the discussion.
"Every business grew in the quarter except for home and business solutions, and even in that segment appliances expanded while lighting lagged," Immelt said. Keith Sherin, vice chairman of GE and chairman and CEO of GE Capital Services, added some detail: “Home and business solutions had another positive quarter. Revenues of $2.1 billion were up 5% as 8% growth in appliances was partially offset by a 4% decline in lighting sales, and segment profit of $83 million was up 5%,” Sherin said.
Immelt also said in the Q&A session following the discussion that rumored interest in acquiring Invensys (for which French rival Schneider Electric made an offer last week) “really doesn’t fit our screen as to the kinds of places where we put capital.”