General Electric Co. posted record second-quarter earnings Friday, thanks in part to a favorable tax settlement involving its Evendale jet engine business.

        For the three months ended June 30, GE reported net income of $4.4 billion, or 44 cents a share, up from $3.9 billion, or 39 cents a share, a year ago.

        Quarterly revenues rose 4 percent to $33.2 billion. The results were in line with analysts' expectations and sent GE's share up $1.25 to close Friday at $28.60.

        Chairman Jeff Immelt said the combination of GE's industrial businesses, GE Capital and its consumer-oriented businesses such as appliances and plastics “position us well for future quarters.”

        The company said it still expects earnings of $1.65 to $1.67 a share for the full year.

        Despite a 10 percent decline in GE Aircraft Engines revenues from a year ago, the Evendale unit's operating profit increased nearly 3 percent to $566 million from $552 million a year ago. GEAE revenues fell to $2.7 billion from $3.05 billion a year ago.

        The just completed quarter included a $358 million gain from a favorable settlement of a lawsuit with the Internal Revenue Service. The company, which disclosed the gain late last month, said it was the result of a settlement with the IRS of a dispute over jet engine exports dating to 1979.

        The quarter also included a $70 million after-tax benefit from gas turbine order terminations and a $350 million after-tax adjustment for estimates of prior-year losses at its Employers Reinsurance Corp. and a $110 million after-tax loss from WorldCom bonds.

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Tax settlement benefits GE
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