GE profit falls as it cuts back

The General Electric plan is set. The company said last month that it would shrink to just three major operations: jet engines, electric power generators and wind turbines.

Now, the company’s focus is on the performance of those industrial businesses and on avoiding further nasty surprises in its trouble-prone finance arm.

General Electric’s second-quarter results Friday showed progress on costcutting and in some of its industrial businesses. But it is not yet a company that has reversed its fortunes and halted its decline.

GE reported a 30 percent decline in net profit to $615 million. After adjusting for one-time charges, the preferred yardstick of Wall Street analysts, the company

reported earnings of 19 cents a share. That was slightly higher than analysts’ average forecast of 17 cents a share, as compiled by Thomson Reuters.

Revenue for the quarter rose 3 percent to $30.1 billion, somewhat above the consensus Wall Street estimate of $29.25 billion.

GE shares fell 61 cents, or 4.4 percent, to close Friday at $13.12.

In a statement, John Flannery, GE’s chief executive, said that the company’s spotlight was now “on unrelenting execution of this plan to improve operating results, strengthen our balance sheet, accelerate growth across our businesses and increase shareholder value.”

Since he became chief executive last August, Flannery has been cutting costs and shedding operations in his drive to create a “simpler and stronger” company.

The biggest move came last month, when Flannery announced that GE would spin off its health care business and sell its multibillion-dollar stake in Baker Hughes, a large producer of oil-field equipment.

The three remaining businesses — aviation, power and renewable energy — accounted for 60 percent of the company’s $122 billion in revenue last year.

The jet engine and wind turbine units are healthy, while GE’s big power-turbine business is a turnaround project. It has cutting-edge technology, but the unit badly misjudged a decline in demand, far more so than its competitors. The depth of that problem became apparent shortly after Flannery took over.

The power-generation business continued its decline in the quarter. Its revenue fell 19 percent to $7.58 billion as its operating profit dropped 58 percent to $421 million.

Another weak spot for GE is the uncertainty surrounding its finance unit, GE Capital. It has been pared back sharply in recent years, an initiative begun by Flannery’s predecessor, Jeffrey R. Immelt.

At its peak, when the financial crisis hit, GE Capital had assets of more than $600 billion. Today, that total is down to about $145 billion, and there are lingering risks.