If General Electric (NYSE:GE) is a bellwether for industrial activity globally, then it looks like activity is picking up in early 2014. The company reported first-quarter numbers this morning and revenue fell 2% to $34.2 billion and operating earnings were down 18% to $3.3 billion, resulting in earnings of $0.33 per share.
But when looking at the decline in revenue and earnings we need to consider that GE sold NBCUniversal to Comcast in the past year and that had a negative impact on both the top and bottom lines. If we take out the impact of NBCUniversal, earnings would have been up 9% per share, dominated by the industrial segment.
Industrial profits were up 12% and organic revenue was up 8% on strong demand from aviation and oil & gas. Increased demand for aircraft engines as well as services for the oil & gas industry should drive growth in 2014 and beyond for GE.
GE Capital's results were flat for the quarter and given the de-emphasis of the business on future results that's probably a decent result. GE's North American retail finance business filed for an IPO last month and will be called Synchrony Financial.
These are strong results to start the year and show fruits from GE's renewed focus on industrial and infrastructure products where it sees less volatility than in financial markets. Given the steady growth rate the company's forward P/E ratio of 15 and dividend yield of 3.4% make the stock look like a solid value for long-term investors.