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GE Capital Returns $3 Billion to Parent (Update 2)

  • General Electric reports second-quarter operating earnings of $4 billion, or 38 cents a share, beating the consensus estimate by a penny.
  • Revenue of $36.5 billion misses the consensus estimate of $36.8 billion.
  • Foreign exchange "negatively impacted revenues by $0.9 billion."
  • GE Capital upstreams $3.0 billion to parent.

Updated with GE's separate announcement of a plan to split of its Energy Infrastructure segment into three units, and comment from JPMorgan Analyst Stephen Tusa.

NEW YORK (TheStreet) -- General Electric (GE) on Friday reported that financial arm GE Capital paid the parent company $3.0 billion in dividends during the second quarter.

GE reported second-quarter operating earnings of $4 billion, or 38 cents a share, beating the consensus estimate of a 37-cent profit, among analysts polled by Thomson Reuters. The company earned 34 cents during the first quarter, and also during the second quarter of 2011.

GE's second-quarter revenue totaled $36.5 billion, missing the consensus estimate of $36.8 billion, but increasing from $35.2 billion during the first quarter, and $35.6 billion during the second quarter of 2011.

The company said that Foreign exchange "negatively impacted revenues by $0.9 billion."

GE CEO Jeff Immelt said that "GE Capital's strong operating performance and capital position allowed it to return a $3 billion dividend to the parent, and our Industrial segments delivered another quarter of double-digit organic revenue growth," and that the company's "strategy to invest in growth markets is paying off, as we achieved orders expansion in growth markets of 14% and revenue growth of 17%," while ending "the quarter with a record backlog."

General Electric's shares were up 1% in morning trading, to $20.00, after the company separately announced that it would split its Energy Infrastructure segment into three separately reporting units, which Immelt said would "reduce costs and increase our speed, focus and agility in the marketplace so we serve customers better." Immelt added that the move would "greatly simplify the way we communicate to investors and customers."

Second-quarter revenue for the Energy Infrastructure segment totaled $11.9 billion, increasing from $11.2 billion in the first quarter, and $10.4 billion during the second quarter of 2011. The segment's second-quarter profit was $1.76 billion, increasing from $1.52 billion the previous quarter, and $1.55 billion a year earlier.

The company said that second-quarter "Infrastructure orders were $23.1 billion, down 1% primarily driven by a 37% decrease in orders for wind turbines. Orders were up 8% on a year-to-date basis."

Second-quarter Aviation revenue totaled $$4.86 billion, declining from $4.89 billion the previous quarter, but increasing from $4.7 billion a year earlier. Segment profit was $922 million, increasing from $862 million in the first quarter, but declining from $959 million in the second quarter of 2011.

Healthcare revenues totaled $4.50 billion during the second quarter, growing from $4.30 billion in the first quarter, but flat from a year earlier. Profit for the Healthcare segment came in at $694 million in the second quarter, increasing from $585 million in the first quarter, but declining from $711 million in the second quarter of 2011.

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