By Lewis Krauskopf and Ernest Scheyder
NEW YORK Dec 18 General Electric Co expects profit from aviation, healthcare and other industrial units to rise at least 10 percent next year as it aggressively invests in manufacturing while shrinking its finance arm.
The conglomerate said on Wednesday it expects company-wide profit to rise in the single digits next year, and that it was on track to cut its finance unit's share of total profit to 30 percent by 2015.
GE is trying to reduce its dependence on earnings from the volatile financial sector and return to its industrial manufacturing roots with 3-D printers and products such as sensors for oil pumps and jet engines that collect a plethora of key data for operators.
"We stand here going into 2014 as an immensely strong company," Chief Executive Jeff Immelt said in a Wednesday presentation to investors in the New York studio where "Saturday Night Live" is produced.
Immelt, CEO since 2001, said China remains one of GE's main growth areas, with strong demand for jet engines, locomotives and gas turbines.
"China is still a great story," Immelt said.
In the United States, Immelt characterized the business climate as improving.
"Our expectations is 2014 is slightly better than 2013," he told reporters after the investor meeting.
Total revenue for 2014 should range from flat to a 5 percent increase, GE said.
Analysts, on average, expect GE to increase earnings by about 6 percent next year to $1.74 per share, according to Thomson Reuters I/B/E/S. Revenue is expected to rise by nearly 3 percent in 2014 to $149.7 billion.
Immelt said company, which has been buying back shares, is on track to have less 9.5 billion shares outstanding by 2015, down from roughly 10.12 billion shares today.
Noting that recent acquisitions have been in the $1-4 billion range, Immelt said, "We just don't plan to change that."
Immelt said the company is "always looking at the portfolio, and ways to make it better," pointing to recent divestitures such as its sale of NBC Universal earlier this year to Comcast .
"We're not afraid to make portfolio moves," he said.
Immelt said he expects the troubled Power & Water unit, which has seen weak demand for power turbines, to see revenue and profit improve next year, with costs cut about 20 percent in the unit in recent years.
The transportation unit, which makes locomotives and competes with Caterpillar Inc, should see profit and revenue slip next year, due to the weak North American coal market, Immelt said. Coal is primarily transported via rail.
"The business is still going to operate well, it's just the market is going to be tougher," Immelt said.
GE last month said it would spin off its credit card business starting next year, a move that will sharply reduce earnings from the financial unit.
At the time, GE gave a preliminary outlook, in which it said it expected to grow corporate-wide operating earnings per share by single digit percentages next year.
In October, GE posted a record backlog of orders that it said positioned it well for 2014. The company also said it was on track to reach its target of expanding operating profit margin for its industrial businesses to 15.8 percent this year from 15.1 percent in 2012.
By 2016, GE hopes to have margins above 17 percent, Immelt said on Wednesday.
GE has also been cutting costs to boost profit, with roughly $1.5 billion cost cuts so far this year.
The stock has gained nearly 31 percent so far this year.