By Scott Malone

NEW YORK (Reuters) - General Electric Co <GE.N> forecast on Tuesday a flat to five percent rise in profit at its industrial units, and its stock rose about 6 percent.

GE did not provide a specific 2009 earnings target in a break with past practice but said overall revenue would be flat to down 5 percent and expressed confidence in its industrial operations despite the year-long U.S. recession.

The conglomerate's industrial units, which include the world's largest maker of jet engines, are weathering the downturn partly because they produce streams of recurring revenue from servicing equipment they already have sold.

"We've got a great service business, that's the reason that a lot of this just holds up," Jeff Immelt, chief executive of the Fairfield, Connecticut-based company, told investors. "Seventy-five percent of our earnings comes from services."

GE's industrial units also make big ticket items such as electricity-producing turbines.

"For people of my generation, this is the toughest environment we've ever seen," Immelt said.

The cost of many key raw materials, which had been a drag for GE profits for the past few years, are now coming down, with easing prices providing a lift to profit margins next year, Immelt added.

But he said the spreading global recession would likely affect some orders in its backlog.

"It's not like every unit in backlog is going to be shipped, but it's great to come into this with a $170 billion backlog," he said.

Immelt expected profit at GE's NBC Universal media unit to be flat to down slightly next year.

"On balance, he's painting a more difficult environment than he did at the end of the third quarter," said Mike McGarr, a portfolio manager who owns GE stock at Becker Capital Management, in Portland, Oregon.

"But some people were prepared for something even worse and maybe that's not panning out," he added.

Immelt reiterated the company's forecast for fourth quarter and 2008 earnings per share.

GE told investors earlier this month the fourth quarter had been tougher than anticipated and cut its profit target to a range of 50 cents to 52 cents per share after earlier hoping to earn as much as 65 cents a share.

GE has lost more than half its market value since Immelt took the reins in September 2001, falling from more than $400 billion then to about $168 billion today.

Industrial heavyweights including 3M Co <MMM.N>, United Technologies Corp <UTX.N> and Honeywell International Inc <HON.N> have warned Wall Street that profit could fall next year as demand slows around the world and the recovery of the U.S. dollar kicks away a prop that had boosted their profit margins early this year.

GE's businesses also include commercial lending, running the NBC Universal media business and making products ranging from big-ticket medical imaging machines to lightbulbs.

In heavy equipment -- its most reliable business, which the company is refocusing on -- GE's competitors include a lineup of some of the world's largest companies, including Swiss engineering group ABB Ltd <ABBN.VX>, French industrial group Alstom SA <ALSO.PA> and German conglomerate Siemens AG <SIEGn.DE>.

GE's stock closed up 5.72 percent, or 97 cents, to $17.92 on Tuesday.

(Additional reporting by Muralikumar Anantharaman in Boston. Editing by Jason Szep, Andre Grenon and Carol Bishopric)

Publié le 16 Décembre 2008 Copyright © 2008 Reuters