GENERAL ELECTRIC, the largest US industrial group by market capitalisation, said its heavy investments in growth markets were paying off, despite an 18 per cent fall in second quarter net earnings to $3.14 billion (€2.58 billion).

The company also said its industrial outlook remained “positive” in spite of a 1 per cent fall in infrastructure equipment orders against 2011’s second quarter to $23.1 billion. Orders would have risen 3 per cent without the effects of a 37 per cent fall in wind turbine orders and foreign exchange swings, it said.

However, orders in crisis-hit Europe were down 10 per cent on the same period last year and revenue in the region down 7 per cent.

Keith Sherin, chief financial officer, said the company expected “more of the same” for the rest of the year in Europe, which provides 17 per cent of company revenues.

The fall in net earnings resulted from $553 million in charges for discontinued businesses during the quarter, compared with $194 million of gains last year.

Operating earnings – GE’s preferred profit measure, which excludes the effect of some pension costs – rose 7 per cent to $4 billion, on total revenues up 2 per cent to $36.5 billion.

Profits attributed to GE’s industrial businesses, including energy infrastructure, aviation and healthcare, rose 7 per cent to $3.74 billion. GE Capital, the financial services arm, posted 31 per cent profit growth to $2.12 billion, which Mr Sherin attributed to falls in bad loan impairments, particularly in property.

“Our strategy to invest in growth markets is paying off, as we achieved orders expansion in growth markets of 14 per cent and revenue growth of 17 per cent,” chief executive Jeff Immelt said.

GE announced that it would split energy infrastructure, its largest single industrial business, into three separate businesses: power and water; oil and gas; and energy management.

Diluted earnings per share fell 17 per cent to 29 US cents. The dividend rose 13 per cent to 17 cents.

Mr Immelt said the company’s industrial outlook remained positive. “We are confident in our double-digit earnings per share growth expectations for 2012,” he said. – (Copyright The Financial Times Limited 2012)