General Electric Co posted quarterly results that blew past Wall Street's expectations, joining a wave of better-than-expected profit in the U.S. manufacturing sector.
The largest U.S. conglomerate also said it raised its quarterly dividend by 1 cent to 15 cents a share, marking its third increase in the payout in the past year. Its shares rose more than 4 percent in pre-market trading.
Following are reactions from industry analysts and investors:
MIKE LENHOFF, CHIEF STRATEGIST AT BREWIN DOLPHIN, LONDON
GE is a bit of a bellwether, and the results right across the sector so far indicate that the season is proving to be better than expected, not just from the point of view of earnings but also from the point of view of revenues. What is coming through is quite a solid underpinning for corporate earnings.
DANIEL HOLLAND, EQUITY ANALYST, MORNINGSTAR, CHICAGO
It's pretty solid. You have got growth coming out of every segment of GE, which is quite encouraging. Infrastructure orders are up 13 percent, which I also think is a very strong indication of a company executing on a strategy of getting back to the core energy and technology infrastructure businesses. It's also quite encouraging to see the dividend bump up one more time.
It's now reaping the benefits of pretty strong growth in the economic recovery.... This week we've seen very strong results out of industrial companies reflecting both a return to manufacturing and also very strong capital investments. This is a pretty strong result and it really is reflective of a different sentiment out there in the manufacturing world around getting back to normal.
JACK DE GAN, CHIEF INVESTMENT OFFICER, HARBOR ADVISORY CORP, PORTSMOUTH, NEW HAMPSHIRE
(The headline numbers) were very good. What needs to happen to determine just how good is to hear to what happened to ending that investment in the (GE) Capital business, because if in fact that was drawn down and they still had a revenue beat that high, then that's dramatic. My guess is they didn't draw down much on the Capital side, and that's why they were able to beat so strongly.
There are about five major businesses within Capital, and the only one that's underperforming is commercial real estate. The really important ones, the most synergistic with the industrial businesses, are commercial loans and leases -- that's what supports their infrastructure. Everything that's originating out of that part of the business now has better net interest margins than in 15 years.
The stock's performance now I think much more is based on what's happening on the industrial side.
HEINZ-GERD SONNENSCHEIN, EQUITY STRATEGIST, DEUTSCHE POSTBANK, BONN
Expectations have clearly been exceeded -- this refers to sales and EPS. The only thing that is a bit of a question mark is the strong rise in operating earnings at GE Capital, which sort of has been the company's black box. That aside, the numbers look strong, and I would expect the market to react positively.
HOWARD WHEELDON, SENIOR STRATEGIST, BGC PARTNERS, LONDON
This is a superb turnaround. It's not a lot difference to what a lot of people are expecting, but this is decent growth. It sends the right message that GE is reflecting an improvement in the U.S. economy, and indeed more importantly it reflects the improvement of the global economy.... I don't see, in my very quick look at this, any specific negative. They will go down pretty well.
(Reporting by Scott Malone in Boston, Nick Zieminski in New York, Christoph Steitz in Frankfurt, and Dominic Lau and Harpreet Bhal in London)