General Electric Co (NYSE:GE) reported a slightly higher-than-expected quarterly profit on Friday, as cost cuts that helped boost margins across its industrial businesses offset revenue that fell below analysts' targets.
Shares of GE rose 4 percent to $25.21 in premarket trading.
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The U.S. conglomerate posted a 4 percent rise in organic revenue, which excludes acquisitions, for its industrial manufacturing businesses, on which Chief Executive Officer Jeff Immelt is increasingly focusing the company.
Although that quarterly growth did not meet some analysts' expectations, GE said such revenue was on track to hit the higher end of its projected range of 4 percent to 7 percent growth for 2014.
Reaching that high end "would be quite a pickup," said Tim Ghriskey, chief investment officer with Solaris Asset Management, which owns GE shares.
"They were able to engineer the earnings in industrials," Ghriskey said. "It’s just that the revenues were relatively weak.
"The stock is reflecting more forward-looking statements than third-quarter results."
Like those of other diverse U.S. manufacturers, GE's shares had been underperforming the broader market this year amid concerns about a soft global economy, after a big run-up in 2013.
"The environment is volatile, but infrastructure growth opportunities exist, and GE is executing well," Immelt said in a statement.
Immelt is seeking to boost GE's earnings contribution from its industrials businesses, which include jet engines and oil and gas equipment, to 75 percent by 2016 from 55 percent last year, while reducing its exposure to the GE Capital finance unit.
GE's third-quarter net income rose to $3.54 billion, or 35 cents per share, from $3.19 billion, or 31 cents per share, a year earlier.
Excluding pension costs and other special items, earnings of 38 cents per share topped the analysts' average estimate by 1 cent, according to Thomson Reuters I/B/E/S.
Revenue rose 1 percent to $36.17 billion, below the $36.79 billion that analysts expected.
Sales fell 2 percent at the power and water segment, which sells energy-producing turbines and is GE's biggest industrial division. But GE projected sales growth of at least 10 percent in the division for the fourth quarter.
GE's profit margin for its industrial businesses came in at 16.3 percent,