General Electric's(GE 8.28%) third-quarter earnings, released before the market opened on Friday, beat analyst expectations at the headline level. Top-line sales fell 1% year over year to $31.7 billion, translating to earning $0.25 per share or $0.29 per share on adjusted basis. Wall Street anticipated the industrial giant would generate $28.6 billion in revenue and earn an adjusted $0.26 per share.

Although GE consolidated sales results beat estimates by a wide margin, the analyst community appears to have adjusted its estimates to exclude the many financial services businesses that GE is in the process of divesting as part of its plan to return to its industrial roots. GE refers to the businesses it plans on retaining as its "industrial + verticals" segment, which reported revenue declined by 2% year over year to $27.9 billion, falling slightly short of analyst sales estimates.

Digging into the report, GE's earnings show it continues to be a solid operator in a sluggish global growth environment.

To illustrate this point, GE's industrial + vertical operating earnings increased by 16% year over year to $0.29 per share -- rather impressive performance considering the segment's sales fell 2%. It demonstrates management has a solid handle on its operations in terms of driving margin growth and managing costs, and suggests that the core business GE will retain after its transformation is capable of driving earnings growth in a sluggish environment.

Margin expansion continued to a be a noteworthy story for GE's industrial business in the third quarter, thanks to favorable mix and pricing, improved productivity, and simplifying its operations:

Source: GE. OP = operating. Industrial operating margins includes GE corporate activities, excluding gains and restructuring.

While a margin improvement of 80 to 120 basis points may not sound like a big deal, it's meaningful for a company of GE's size, which estimates that a 100-basis point improvement in productivity across its manufacturing operations represents a cost savings of $500 million.

Movers and shakers
Five out of GE's seven industrial segments grew their earnings in the third quarter, despite only four segments experiencing revenue growth. The largest contributing segments were aviation and power and water, and the biggest detractors were oil and gas and healthcare.

Data source: GE.

Aviation experienced strong services volumes, spare part orders, and backlog growth, while power and water experienced strong order book growth and margin expansion. Lower oil prices continued to weigh on GE's oil and gas segment, while healthcare's results were dragged down by poor emerging market performance.

Companywide, third-quarter orders were down 26% year over year, due to a tough comparable that included large, one-time locomotive and jet engine orders in the third quarter of 2014. Still, GE's backlog increased by 5% to $270 billion in the third quarter, which acts as a buffer during times of economic uncertainty.

It's also worth mentioning that nearly 75% of GE's backlog is services-based, suggesting there's likely less flexibility for customers to delay when an industrial product requires maintenance, regardless of what's happening in the world economy.

Data source: GE.

Deals in the works
Now that Synchrony Financial has received approval from the Federal Reserve to become a stand-alone bank without GE support, GE will be spinning off the remainder of the consumer financial services business over the next month in a share exchange with GE shareholders. Upon completion, GE expects to generate $18 billion to $21 billion in proceeds, which it will use to buy back 6% to 7% of GE's shares outstanding by mid-November. Including this exchange, GE is targeting to return $30 billion in capital to shareholders this year.

What's more, GE is expecting to close on Alstom and selling its appliances business to Electrolux in the coming quarter -- two deals that have been held up by regulators. Come the first quarter, GE will apply to remove its systemically important financial institution, SIFI, designation, which, if granted, will reduce its financial regulatory scrutiny and improve its operating flexibility.

A solid operator
GE CEO Jeff Immelt may have called the macroeconomic environment "volatile" in the third quarter, but it didn't stop the company from executing well across its businesses. The company drove earnings growth from five out of seven of its industrial segments despite overall revenue weakness, expanded its industrial margins by a respectable amount, and managed its operations with discipline.

Ultimately, GE is a solid operator that's dealing with the complexity of operating in a sluggish global growth environment as it undergoes a massive transformation. Although it's a tall order, GE has shown it's possible to operate with excellence when things get complicated.