General Electric Co. (NYSE: GE) has signed agreements with a number of companies that will use GE’s technology to explore for energy, generate power, and make beer in China. The contracts literally span the globe, with many of the deals going to projects in emerging economies.

The largest piece of the new contracts goes to the company’s wind turbine business, which added orders for 750 1.6-100 wind turbines. This brings total sales of this turbine to 1,248 since January. GE noted that the turbines are set to be installed in wind farms in North and South America.

In Iraq, GE will provide technology for an enhanced oil recovery project with BP plc (NYSE: BP) in the country’s huge Rumaila oil field. There are also contracts for oil and gas extraction projects in Australia and Brazil, a large wind farm in Brazil, gas-turbines in Egypt, and a floating LNG platform in Australia for the Prelude project operated by Royal Dutch Shell plc (NYSE: RDS-A).

In China, GE has entered an alliance with Anheuser-Busch InBev (NYSE: BUD) in which the company will provide energy efficiency and water saving technology in InBev’s existing and new brewing facilities. GE noted that this is its first effort in the food and beverage industry.

GE’s Energy Infrastructure business generated $10.4 billion in revenues in the company’s second quarter. That’s about $40 billion annually, which means the new contracts represent about 7.5% of the division’s annual revenues. That’s good, but not eye-popping.

The problem the company faces in its Energy business is profitability. Last quarter revenues increased by 9%, but profit fell by -19%. The culprits were rising costs and lower prices.

New contracts need to boost profits, not just add to GE’s revenue. While the wind turbine deal is the largest, it is likely that it was also the most competitive and doesn’t offer much in the way of increased profitability. Same with the oil and gas deals.

The entry into the food and beverage sector could be the most important from a profitability viewpoint, but it won’t change much in the short-term. The deal is really not a contract, only an agreement to work on something new. GE needs to turn this opportunity into revenue and profit.

GE shares are up about 0.4% just after the market opened this morning, at $16.24, in a 52-week range of $14.72-$21.65.

Paul Ausick

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