NEW YORK (CNNMoney.com) -- General Electric reported quarterly earnings and revenue Friday that fell from year-earlier results, but the company said it expects an improving economy will help its profit rise throughout the rest of the year.The Fairfield, Conn.-based conglomerate said its first-quarter sales fell 5% to $36.6 billion, missing the forecast of analysts polled by Thomson Reuters of $37.1 billion.
Net income fell 18% to $2.3 billion, or 21 cents per share, for the period ended March 31. Analysts forecasted earnings of 16 cents per share.
Shares of GE rose nearly 3% in premarket trading, topping $20 for the first time since October 2008.
"GE's environment continued to improve in the first quarter of 2010," said Jeff Immelt, GE's chief executive, in a statement. "We are expanding industrial margins and realizing benefits from over two years of restructuring, while increasing investment in [research and development] to drive profitable organic growth."
Immelt said the company expects earnings to grow for the rest of 2010, though GE may take more cost-cutting measures to improve profit growth even more.
As the economy improved, GE said orders rose in its health care and energy businesses, and the company increased spending on research and development by 16% in the quarter.
The improving economic environment and credit markets also helped the company's finance arm, GE Capital, which continued to stabilize in the quarter. GE Capital's mortgage-related losses continued to decline and the division turned a profit of $600 million. Immelt said the finance unit is on track for earnings growth for the foreseeable future.
"GE Capital losses seem to have peaked," Immelt said. "We are originating new business at attractive margins and our funding costs have declined. Commercial real estate continues to be challenging, but the risks are understood and we expect them to be manageable."
The CEO reiterated his statement from the prior quarter that the company expects to increase its dividend in 2011. GE had slashed its dividend 68% to just 10 cents per share in February 2009 as the recession cut into the conglomerate's financial results.
After a miserable 2009 in which GE was the second-worst performer in the Dow Jones industrial average, shares of GE (GE, Fortune 500) have been on a tear in 2010, rising 29% this year, compared to the Dow's 7% rise.