GE's Jeff Immelt Sees Improving Growth in Second Half of 2016

General Electric Co. Chief Executive Jeff Immelt said he is optimistic about the second half of the year, even as the company struggles with weak oil prices and sluggish economic growth.

Fueling that point of view, Mr. Immelt said, are stronger orders for power turbines, an improving markets for renewable-energy products and better demand in health care.

"We see commitments. We see pipeline. We see big deals under way," Mr. Immelt told analysts at an investor conference in Florida on Wednesday. "It's the first time in a long time that the two biggest health-care markets, being the U.S. and China, are still in pretty good shape."

Over the past year, Mr. Immelt has been leading the company away from its reliance on financial services, selling the bulk of its GE Capital lending arm as part of a pivot back toward industrial businesses. GE makes turbines for power plants, jet engines, locomotives and health-care equipment.

The company is about 80% of the way through its exit of GE Capital, he said on Wednesday, and ahead of schedule. GE says the financial exits and a parallel move to shed its consumer-credit unit will return $35 billion in capital to the parent company through 2018.

Among the positive signs Mr. Immelt cited is improving demand in GE's two biggest markets for health-care equipment such as MRI machines, X-ray machines and CT scanners: the U.S. and China. Those two markets are "kind of off their back" after sluggish performances in previous years, Mr. Immelt said. He cited a "huge rail deal in India," and a "very strong orders profile in power."

He said the company expects to get the bulk of its anticipated $19 billion in revenue from its power business in the second half of the year and affirmed that GE is on track to meet its earnings forecast for the year.

Strong performance in those business units is helping to offset the continuing pain in GE's oil-and-gas division, which is aggressively cutting costs and revising some of its previously booked orders thanks to the widespread pullback in capital spending in the oil industry.

GE has forecast that operating profit in the oil and gas unit will fall 30% this year, following a 12% decline in operating profit in the business in 2015.

Write to Ted Mann at [e-mail]

(END) Dow Jones Newswires

May 18, 2016 15:55 ET (19:55 GMT)

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