GE Raises Profit Outlook; CEO’s Bullish Comments Help Lift Stock

NEW YORK — General Electric Co. on Thursday raised its profit forecast for the year and its chief executive said the U.S. economy was “pretty darn good,” giving GE shares their biggest one-day percentage boost in 21 months.

GE rose 91 cents, or 2.8%, to $33.59, its best one-day gain since January 2004.

The bullish comments from GE CEO Jeffrey Immelt were notably more optimistic than a survey of U.S. CEOs by the Business Council, chaired by Immelt, which found the majority expressing only temperate optimism.

GE, whose products include aircraft engines, medical scanners and television programs, said strong orders for its equipment and services fueled profit in its third quarter. It said the momentum was carrying over into the fourth quarter.

In an interview with CNBC television, a unit of GE, Immelt said that although optimism about the U.S. economy was moderating, “I still think the underlying economy is still pretty darn good.”

Immelt said that moderation was due to volatility created by energy costs, the effect of hurricanes that hit the Gulf Coast and rising interest rates.

After Immelt’s comments, GE estimated third-quarter profit of 44 cents a share, from a previous forecast of 43 cents to 44 cents, matching Wall Street estimates. GE is set to report third-quarter results Oct. 14.

GE also predicted 2005 profit of $1.81 to $1.83 a share, raising the bottom end of its forecast by a penny. That compares with analyst forecasts of $1.82, according to Reuters Estimates.

The company said it would increase its share buyback program by $1 billion to more than $4 billion this year.

Immelt said GE’s global strength -- particularly at its plastics business -- would help it cope with record energy costs and compete with rivals overseas that benefit from lower feedstock costs.