General Electric reported second-quarter results Friday that reflected its steady return to its industrial roots, as the giant conglomerate looks to accelerate the shift.
GE, the largest industrial company in the United States, said revenue from its industrial businesses, with products including jet engines, power generators, oil field machinery, and medical imaging equipment, rose 7 percent. Revenue at its sizable finance unit, GE Capital, declined 6 percent.
The reduction of the finance side of the GE portfolio is by design, as the company has steadily trimmed its dependence on GE Capital since the financial crisis hit in 2008.
GE also said Friday that it intended to spin out its North American consumer finance business, Synchrony Financial, in an initial public offering in late July.
The SEC filing described the offer as “a first step in GE’s exit” from the business. The spinoff with an IPO yields considerable tax savings compared with the faster path of shedding the consumer finance unit in a sale to another company, Jeffrey S. Bornstein, GE’s chief financial officer, noted in an interview.
The further move away from finance comes only a month after GE agreed to buy the energy businesses of Alstom, a French industrial corporation, for $13.5 billion. GE says it is on target to reduce the share of its earnings that come from GE Capital to 25 percent by 2016. Before the financial crisis, the finance unit routinely accounted for more than half its earnings. In the second quarter, GE Capital contributed 43 percent of the company’s earnings.
Total revenue rose 3 percent to $36.2 billion, up from $35.1 billion in the year-earlier quarter. GE said net income rose 13 percent to $3.5 billion.