GE claims wind business lifted third quarter

Despite tough economic conditions overall, engineering giant GE claims that its wind business has helped to improve the performance of its energy business in the third quarter of this year.

Addressing analysts in a conference call on Friday, GE chairman and chief executive Jeff Immelt said the economic environment was tough but that GE was well placed to be able to weather the storm.

"Clearly the environment remains very volatile. The global financial system is tough. We see consumer confidence falling and unemployment up against last week but we still see pockets of strength," said Immelt. "The company is well placed to perform no matter what economic environment we see in the future."

According to GE its energy business, GE Energy, continues to be strong thanks in part to a growing wind business. "Wind orders were up 50 per cent to $2.3bn (£1.4bn) and today our wind commitments are $14bn, up 90 per cent from a year ago," said GE vice chairman and chief financial officer Keith Sherin.

GE claims that more than 1,000 wind turbine units were delivered in the quarter, up 70 per cent on last year or about 340 units, which helped drive up the segment profit 36 per cent.

"If you look, you will see that the energy business has a very strong backlog position, driven by incredibly broad global demand," said Sherin.

But despite the claims made to analysts, GE has warned of some impact on its wind business from the global downturn. Speaking to BusinessGreen last week, at its Salzbergen facility in Germany, GE Energy's global sales leader for wind energy, Mete Maltepe, said that the rising cost of commodities such as steel would drive up the price of turbines.

Maltepe also signaled that the financial turmoil and the current state of the credit markets would affect GE's renewable business in the short term. "Our view of what is going on in the markets is that short term there is turmoil – in the short term projects will be delayed," he said. "But the fundamentals are that people need energy and governments support renewable projects. Wind energy projects are quality projects and when credit is tight money usually goes to quality projects.

GE acquired its wind business as part of its purchase of Enron Wind Corp in 2002. GE bought the unit in a $325m bankruptcy sale following Enron's spectacular implosion in 2001.