Earnings for GE, McDonald’s, Caterpillar, Verizon, SunTrust and Reynolds American

by Jenny Novac on July 28, 2011

Dow Industrial firms: General Electric

Earnings for GE, McDonald’s, Caterpillar, Verizon, SunTrust and Reynolds American

Earnings for GE, McDonald’s, Caterpillar, Verizon, SunTrust and Reynolds American

General Electric Co.’s lending arm,GE Capital, helped the Fairfield, Conn.-based company boost profits 21 percent in the second quarter to $3.76 billion.

GE reported income amounting to 35 cents a share for the three months ended June 30. That compares with $3.11 billion, or 28 cents a share, for the same time last year. Revenue fell 4 percent to $35.6 billion, in part because of GE’s sale of a majority stake in NBC Universal to Comcast in February.

GE’s results beat Wall Street estimates for 32 cents a share on revenue of $34.7 billion, according to FactSet.

GE Capital more than doubled its profit to $1.66 billion during the quarter, driven by big gains from its credit card, mortgage, and commercial lending and leasing businesses.

GE’s industrial businesses were led by its locomotive unit, where profit for the quarter jumped nearly sevenfold to $178 million. The aviation business recorded a 9 percent increase in earnings, and profit for its health-care business increased 8 percent.

Profits dropped 3 percent overall for GE’s various energy and technology infrastructure units.

Earnings dropped by 19 percent at GE’s energy infrastructure business, as prices slumped for wind turbines and other renewable energy equipment.

Caterpillar

Continued robust demand for Caterpillar’s heavy equipment boosted the company’s second-quarter profits by 44 percent, but higher costs and cautious comments about China’s economy sent shares sliding Friday.

The Peoria, Ill.-based company said it generated $1.02 billion net income, or $1.52 a share. That’s up from $707 million, or $1.09 a share, a year ago.

Caterpillar’s acquisition of Bucyrus cut into second-quarter profit and weighed down Caterpillar’s outlook. Without it, quarterly profit per share would have been $1.72. That was still below Wall Street expectations of $1.74, according to a poll of analysts by FactSet.

Revenue grew 37 percent to $14.2 billion, easily topping Wall Street estimates.

McDonald’s

McDonald’s said Friday that its net income rose 15 percent in the second quarter as it continues to entice customers to buy new menu items even as the sluggish economy forces them to cut back spending in other areas.

Oak Brook, Ill.-based McDonald’s net income rose 15 percent to $1.4 billion, or $1.35 a share, during the quarter. Revenue was up 16 percent to $6.9 billion, topping analysts’ estimates of $6.6 billion.

Verizon Communications

Verizon Communications Inc. is seeing a big boost from the iPhone, adding more new subscribers on contracts in the second quarter than it has in two and half years.

New York-based Verizon said its net income was $1.61 billion, or 57 cents a share, in the three months ended June 30. A year ago, it posted a loss of $1.19 billion, or 42 cents a share.

Analysts polled by FactSet were expecting earnings for 55 cents a share, on average.

Revenue rose 2.8 percent to $27.5 billion from $26.77 billion and in line with analysts’ expectations.

Excluding the sale of phone lines in 14 states at the end of last year’s second quarter, Verizon’s revenue grew 6.3 percent on the back of its thriving wireless operations. However, only 55 percent of Verizon Wireless’ profits flow to Verizon Communication’s bottom line, because British carrier Vodafone Group PLC owns 45 percent of the cellular carrier.

Major local employer: SunTrust Banks

SunTrust Banks Inc. said Friday that it returned to a profit in the second quarter as its loan portfolio improved and it set aside less money to cover charge-offs.

It reported net income of $174 million, or 33 cents a share, in the three months ended June 30, compared with a net loss of $56 million, or 11 cents a share, in the year-ago period.

Analysts on average expected earnings of 31 cents a share, according to FactSet.

Atlanta-based SunTrust said its net charge-offs were $505 million in the quarter, which was down 30 percent from $722 million in the year-ago quarter. The decline came from across all loan segments, but particularly in the residential loans.

The improvement allowed SunTrust to set aside less money for souring loans. The company said provisions for credit losses eased considerably to $392 million, down from $662 million a year ago.

Total revenue for the quarter meanwhile rose to $2.2 billion, from $2.16 billion a year ago.

Company of interest: Reynolds American

Reynolds American Inc.’s second-quarter profit fell almost 11 percent, chiefly on charges related to a legal case, the nation’s second-biggest tobacco company said Friday.

Net income fell to $304 million, or 52 cents a share, for the period ended June 30, from $341 million, or 58 cents a share, a year ago.

Revenue excluding excise taxes rose less than 1 percent to $2.27 billion from $2.25 billion a year ago, beating analyst estimates of $2.1 billion.

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