GE profit meets expectations; outlook steady

By Scott Malone

BOSTON (Reuters) - General Electric Co (GE.N) on Friday posted a second-quarter profit in line with Wall Street forecasts as its finance business recovered from a brutal first quarter, but the company warned those operations are not out of the woods yet.

The U.S. conglomerate, whose operations range from making jet engines to running NBC Universal media, left its full-year profit forecast unchanged at flat to up 5 percent.

But GE, a bellwether for the entire U.S. economy, forecast a rough third quarter for its finance arms, with commercial finance down 10 percent to 15 percent and profit at GE Money flat to down 5 percent, due to a tough real estate market and rising loss provisions.

The second-quarter results came three months after GE stunned Wall Street with an unexpected drop in first-quarter profit, saying the global credit crunch and near collapse of investment bank Bear Stearns had taken a heavy toll on its finance arms, which make up about half its business.

"There was a lot of concern as to the credit crisis ... and how it was going to affect GE Money" in the second quarter, said Perry Adams, vice president and senior portfolio manager at Huntington Private Financial Group in Traverse City, Michigan. The unit's earnings fell 9 percent, but the consensus forecast was for a decline of 15 percent to 20 percent, he said.

GE, the No. 2 U.S. company by market capitalization after Exxon Mobil Corp (XOM.N), said net income in the quarter came to $5.07 billion, or 51 cents per share, down from $5.38 billion, or 52 cents, a year earlier.

Earnings from continuing operations were flat at 54 cents per share, matching the average Wall Street estimate as compiled by Reuters Estimates.

Revenue rose 11 percent to $46.89 billion.