General Electric is hoping to tap into $2 trillion worth of government stimulus spending over the next three years to beef up revenue in its energy infrastructure division, including renewable energies such as wind and thermal power.
GE said Friday its toal revenue fell 9 percent in the first three months of 2009, to $38.4 billion, while net profit fell 40 percent, to 26 cents a share. Much of the decline came from its financial and entertainment units. But energy infrastructure saw revenue increase by 7 percent to $8.24 billion and profit grow by 19 percent to $1.1 billion.
GE’s energy infrastructure is a mix of renewable energies such as wind and solar with other technologies such as oil-extraction equipment, gas turbines that power utility generation plants and systems that convert coal to synthetic gas. Revenue from the division doubled between 2004 and 2008 to $39 billion, with much of that growth coming in wind and thermal energies.
Revenue for wind equipment declined 2 percent in the quarter, while thermal equipment sales surged 55 percent. In the short term, these segment may not keep holding up revenue. GE said it saw $500 million worth of orders canceled in the quarter, $400 million of them in the energy division. New orders for thermal equipment decreased by 53 percent to $1.1 billion while those for wind equipment fell by 8 percent to $1.17 billion.
But GE is pushing for contracts with nine countries that are planning on spending $2 trillion on energy and other projects. “I think we will do better than most on stimulus,” GE CEO Jeffrey Immelt said in a conference call, noting that the spending will be stronger in 2010 and 2011 than this year. In particular, the company is looking toward smart grid projects in the U.S. as well as wind farms in the U.S. and China.