GE cheered by PTC extension
Industrial giant GE again reported lower wind turbine sales as a drag on its Infrastructure division, but took heart from the extension of the US production tax credit (PTC).
GE's Infrastructure orders for the fourth quarter of 2012 “were $28.5bn, up 2%, and up 7% excluding the effects of a decrease in orders for wind turbines, and FX (foreign exchange)”.
The US behemoth's wind turbine business suffered at the tail end of last year as orders wilted in the face of uncertainty over the future of the key federal incentive.
GE CEO Jeff Immelt told financial analysts that the eventual one-year PTC extension was a "tangible" benefit from the last-gasp negotiations to avoid America's "fiscal cliff" crisis.
"That opens up a two-year window", said Immelt, referring to the fact that projects need to start construction, rather than complete work, during the calendar year.
"We hear more positive comments coming out of the renewable energy sector."
Immelt said the PTC extension should boost the aggregate of GE's wind orders over the next two years, but added that it was too early to say exactly how that would play out on a quarter-by-quarter basis.
And the GE boss cautioned that the group's wind turbine business would remain "lumpy" in 2013.
GE reported overall fourth-quarter operating profits of $4.7bn, up 11% on the same stage in 2011, on revenues of $39.3bn, 4% up.
Full-year operating profits were $16.1bn, up 8% on 2011’s figure.
Immelt said: “We ended the year with a strong quarter despite the mixed global economic environment.
“The outlook for developed markets remains uncertain, but we are seeing growth in China and the resource-rich countries.”