Corporate News: GE Points to Recovery Despite Profit Decline --- Earnings Drop 42% as Shrinking Finance Unit Continues to Weigh on Results; Commercial Real Estate Creates Concerns
General Electric Co. reported signs of a slow global economic recovery, even as it posted a 42% third-quarter earnings decline driven by lower-than-expected revenue and more write-downs at its finance unit.</br></br>"The global environment has definitely improved," Chairman and Chief Executive Jeff Immelt told investors. "We are expecting a gradual recovery."</br></br>GE, of Fairfield, Conn., posted net income of $2.49 billion, or 23 cents a share, down from $4.31 billion, or 43 cents a share, a year ago. Revenue fell 20% to $37.8 billion from $47.2 billion, on declining orders for industrial equipment and the ongoing shrinkage of the finance unit, known as GE Capital.</br></br>Earnings at GE Capital fell 87% to $263 million amid rising delinquencies and write-downs at its consumer, business-loan and commercial-real-estate units. A tax benefit helped the results.</br></br>The real-estate group swung to a $538 million loss from a $244 million profit a year ago. Delinquencies in the $84 billion real-estate portfolio rose to 4.19%, from 0.19% a year ago. GE said delinquency rates in its consumer-loan portfolio appeared to have "leveled off" in the third quarter at 4.78%, up from 2.74% a year ago.