It’s becoming a familiar story for investors of General Electric. In its third quarter, the storied Fairfield, Conn.-based conglomerate posted earnings that beat consensus, but were once again weighed down by its troubled finance arm. Net earnings were down 44% from the year prior. While that number may have bested analysts’ expectations, the company’s revenues fell 20%, more than analysts expected, sending shares down about 3% in early trading.

That’s a sign that investors are looking for more than just earnings that meet or beat the Street. As the economy begins showing signs of life–even GE Chairman and CEO Jeffrey R. Immelt said in this morning’s statement that “the global economic environment is beginning to slowly recover”–investors are increasingly watching the top line, seeking companies that can grow along with the recovery.

For now, GE Capital is hurting the company’s chances. Rather than look for ways to grow, GE is trying to reduce the size of its massive finance unit, which includes everything from store-brand credit cards to consumer mortgages to commercial real estate. The company’s finance arm posted profits of $263 million (down 87% from $2 billion in the third quarter of last year) but sales of just $12 billion (down 30% from $17.3 billion in the same period in 2008). Revenues slipped across all GE’s other varied units, with the company’s energy infrastructure division showing the strongest performance.

Meanwhile, earnings were up in GE’s energy infrastructure, appliance and lighting, and media units, with NBC Universal showing one of the strongest quarterly profit growths in the company, at 13% from the year prior thanks to an after-tax gain on the sale of its stake in the A&E cable channel. That could make the reported deal with Comcast, in which reports have said the cable provider plans to acquire a controlling stake in the unit, more attractive. At the very least, it’s sure to make the deal a hot topic Immelt will have to answer for analysts in this morning’s earnings call.

Author: BusinessWeek – Management IQ