General Electric Co posted better-than-expected quarterly profit, as a strong performance at its large energy operation offset declines at the GE Capital finance and NBC Universal units.

Its shares, which have been beaten down over the past year, rose 3.5 percent in premarket trading and investors said the 36 percent drop in profit could be a sign that the current recession is approaching its nadir.

The numbers are showing stabilization in the global economy and in the performance of GE stock, said Jim Hardesty, president of Hardesty Capital Management in Baltimore, which owns GE shares. The result still wasn't good, though.

The largest U.S. conglomerate said its order backlog -- a key indicator for sales of electricity-producing turbines, jet engines and other heavy equipment -- held steady at $171 billion and that its finance arm was on track for a profitable year.

GE is viewed as a barometer of the economy due to the size and breadth of its operations.

The Fairfield, Connecticut-based company plans to cut its costs by more than $5 billion this year.

PROFIT TUMBLES

GE's net income attributable to common shareholders fell 36 percent to $2.74 billion, or 26 cents per diluted share, down from $4.3 billion, or 43 cents per diluted share a year earlier.

Analysts, on average, looked for profit of 21 cents per share, according to Reuters Estimates.

Revenue fell 9 percent to $38.41 billion. Its order backlog remained stable at $171 billion.

Profit at GE Capital -- the company's primary weak spot -- fell 58 percent to $1.12 billion.

GE's Energy Infrastructure unit -- which makes products ranging from gas-fired turbines to solar panels -- notched a 19 percent rise in profit, to $1.27 billion.

Energy Infrastructure has been the backbone of growth for the company, said Daniel Holland, equity analyst at Morningstar in Chicago. Looking at the demand for gas turbines and the fact that we have a good incentive plan for renewable energy in place now, that should keep growth going pretty strong there.

Profit at the NBC Universal media business fell 45 percent to $391 million on a 2 percent drop in revenue.

GE has ceased giving numeric per-share profit forecasts, instead providing investors with a framework of how it expects each of its business units to perform this year.

That framework calls for profit to be flat to up 5 percent at its infrastructure arms and flat to down slightly at NBC. In December it forecast that GE Capital would earn about $5 billion this year, though last month it told investors that based on the Federal Reserve's expectations for the U.S. economy, the finance unit's profit could be half that.

During the first quarter, GE cut its quarterly dividend by 68 percent and was stripped of its top-tier AAA credit rating by both Moody's Investors Service and Standard & Poor's.

SHARES RISE

Its shares were up 3.5 percent to $12.70 in pre-market trading.

As of Thursday's close, the shares are down approximately 63 percent over the past 12 months, a far sharper drop than the 36 percent fall of the Dow Jones industrial average <.DJI>.

GE shares are now trading at more than double their 52-week low of $5.86 hit on March 4.

It's not going to double again from here, said Edward Maraccini, portfolio manager at Optique Capital Management in Milwaukee, which owns GE shares. But as long as we see stabilization in results and for the capital position to stop deteriorating, it can definitely start to build off a base.

In heavy equipment, GE's competitors include a lineup of some of the world's largest companies, including Swiss engineering group ABB Ltd , French industrial group Alstom SA and German conglomerate Siemens AG .

(Reporting by Scott Malone, additional reporting by Ryan Vlastelica and Nick Zieminski in New York and Atul Prakash in London; Editing by Derek Caney)

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