General Electric Co said on Tuesday demand for its industrial products and sales in China will allow it to post strong profit growth in 2011 even as margins come under pressure from costs related to research and acquisitions.

Things are definitely getting better, we're seeing it across the portfolio right now, said Jeffrey Immelt, chief executive of the largest U.S. conglomerate. The performance is strengthening in the fourth quarter and we see good momentum as we go into 2011 and beyond.

Immelt added: GAAP earnings will be up next year strongly, operating earnings will be up next year strongly.

GE has been counting on strong growth outside the United States, particularly in China, India and the Middle East, to offset a sluggish recovery at home. Sales in China will be in the high double digits in 2011.

Its industrial businesses will grow next year and accelerate in 2012, GE said.

GE has ceased providing specific per-share profit targets, instead offering a framework of how it expects its businesses to perform.

Analysts on average expect the company to post 2011 profit of $1.27 per share, up 13 percent from expected 2010 levels, on revenue of $145.4 billion, down 3 percent.

GE, whose products range from wind turbines and industrial technology to machines used in hospitals and a large financing arm, also said it aimed to maintain an attractive dividend payout and that it aims to increase operating earnings at least as quickly as its S&P 500 peers.

It also said it remained interested in complementary acquisitions, preferably ones between $1 billion and $3 billion in size.

The company is winding down its restructuring mode. The fact that they're talking about growth at all is modestly above where many analysts have been, said Keith Goddard, manager of the Capital Advisors Growth Fund which owns GE shares.

Investors are in a position to have a much higher level of confidence in the numbers, Goddard said, adding he liked the company's characterization of a multi-speed world where GDP growth rates differ widely.

Companies like GE are going to redesign their portfolios to go where the growth is, and GE is in a position to do that better than anyone, he said.

GE shares closed up 7 cents at $17.69 on the New York Stock Exchange.


Corporate America's view of the economic recovery has been gradually improving over the past few months.

Last week, fellow blue-chip manufacturers 3M Co and United Technologies Corp said they were looking for profit to rise about 10 percent next year at their midpoints.

Earlier on Tuesday, the Business Roundtable reported that CEO confidence in the economy spiked to a four-year high in December, with some 80 percent of corporate chiefs expecting sales to rise over the next six months.

As I think about 2011, I feel a lot better than I've felt in the last two years, in terms of what's going on in the global marketplace, Greg Hayes, chief financial officer at United Tech, told investors on Tuesday.

Immelt said GE planned to buy back Berkshire Hathaway Inc's preferred stake in the company no later than next October.

GE next year will begin reporting operating results, which exclude some noncash pension expenses, as its primary measure of performance, Immelt said. Honeywell International Inc changed its approach to pension accounting this month in an effort to make its results more comparable to peer companies.

Honeywell is due to lay out its expectations on Wednesday.

(Additional reporting by Nick Zieminski and James Kelleher; editing by John Wallace and Matthew Lewis)