HARTFORD, Conn. – General Electric Co. reported second-quarter profits of $5.4 billion Friday and said it was getting out of the U.S. mortgage business.
Profits for the quarter ending June 30 were up by more than 10 percent from $4.9 billion in the same quarter last year, led by its oil and gas, aviation, energy and commercial finance businesses.
Earnings per share of 52 cents were in line with what analysts expected, according to a survey by Thomson Financial.
Jeff Immelt, chairman and chief executive, said worldwide demand for the Fairfield-based conglomerate's infrastructure products and services is "unprecedented with double-digit revenue and earnings growth."
Immelt said GE will quit its U.S. mortgage business and sell off its existing loans. GE Money had strong growth in revenues and assets and increased its profit by 8 percent, despite losses in its WMC mortgage business, he said.
"We have made the decision to exit this business and substantially reduced our exposure by selling $3.7 billion of WMC loans in the quarter," Immelt said.
GE will use the proceeds from a previously announced $11.6 billion sale of its plastics division to a Saudi firm primarily to accelerate its planned 2007 stock buyback program.
On Friday, GE said it will increase its 2007 share repurchase program to $14 billion. The remaining $12 billion will be allocated during the second half of the year.
Revenue for the quarter at GE was $42.3 billion, up from $37.7 billion from the second quarter of 2006.
Immelt said that due to strong orders, GE is forecasting third-quarter earnings per share of between 54 cents and 56 cents, which would be 15 percent to 19 percent greater than profits reported during the same period last year.
Profit at GE's Infrastructure and Commercial Finance businesses grew by 23 percent and 18 percent, respectively.
Shares rose 61 cents, or 1.56 percent, to $36.61 at the open of trading Friday.