General Electric yesterday reported an 18 percent drop in fourth-quarter earnings as a tough economy in Europe and less-than-stellar performance by its healthcare and home appliance divisions weighed the company down.
Chief executive Jeff Immelt said on an earnings call that the quarter was still a strong one for the American conglomerate — but could have been better, obviously — and GE remains well-positioned for the months ahead.
“Strength” and “resilience” were among his favored descriptive words, despite $38 billion in fourth-quarter revenues.
Profit at the company’s industrial businesses rose 1.5 percent in the fourth quarter, but its industrial margin continued to shrink to 16.2 percent. (In the fourth quarter of 2010, it was 17.6 percent.) GE seeks to boost the margin by a half a percentage point in 2012.
Nonetheless, infrastructure orders (worth $28.6 billion) were up 15 percent for the quarter — buoyed by its energy and aviation divisions — and the company is sitting on a $200 billion order backlog, the largest in its history.
Finally, the company ended the year with an R&D investment 16 percent greater than in 2010. It highlighted its efficient LEAP-X aircraft engine, FlexEfficiency 50 Combined Cycle Power Plant and Discovery IGS 730, a mobile robotic interventional X-Ray, as results of the investment.
2012 promises for “continued volatility,” Immelt said.
