Strong media results push GE Q2 up

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General Electric, the world's second-biggest company, reported a 10% increase in second-quarter income and executives praised the leadership at its NBC Universal unit for delivering its third consecutive quarter of positive earnings growth.

The company made $5.4 billion, up from $4.9 billion in the same quarter a year ago, on revenue that rose 12% to a record $42.3 billion.

GE's results matched expectations, and the company offered current-quarter guidance also about equal to what Wall Street expected. The conglomerate said it would exit the subprime mortgage business and would boost its stock buyback from $12 billion to $14 billion.

Investors liked the news and drove the stock up 1.3% on Friday to $39.50, giving the company a $406.4 billion market capitalization, second only to Exxon-Mobil's $508.9 billion.

Although revenue at NBC Universal declined 6% to $3.6 billion, profit rose 2% to $904 million.

NBC's broadcast network has fallen from first to fourth over the course of a few years despite such hit series as "Heroes" and "The Office," but Bravo and Sci Fi Channel recorded year-to-date ratings increases of 13% and 9%, respectively, and "business day ratings" at CNBC rose 24%.

CFO Keith Sherin said film results alone were up 100% as a strong response to "Knocked Up," "Hot Fuzz" and "Mr. Bean's Holiday" offset a weak showing for "Evan Almighty."

The company sold 5 million more DVDs in the second quarter than it did in the year-ago frame, Sherin said.

He added that NBC.com has made $20 million in the year since its launch and has served 300 million video streams.

Sherin and CEO Jeff Immelt mentioned several times during a conference call with analysts that NBC Universal's "turnaround" was progressing well.

"We really are very positive about NBCU in the second half of the year," Immelt said. "NBCU is in great shape."

In the current quarter, GE expects profit at NBC Uni to rise 5%-10%, about equal to the growth expected at GE Money and better than the flat earnings expected at GE's Healthcare unit. Commercial Finance is expected to lead with 15% profit growth, followed by Industrial at 10%-15%.

"The U.S. consumer seems fine," Immelt said. "Growth is just cooking across the company."

For the first half, NBC Uni earned $1.6 billion, 4% better than the same period a year ago, on revenue of $7.1 billion, 15% less than a year ago.

GE overall turned in net earnings of $9.9 billion for the first half, up 6%, on revenue from continuing operations of $80.9 billion, up 10%.
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