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General Electric (GEFree General Electric Stock Report), the largest industrial conglomerate in the world, has posted first-quarter results that were, for the most part, in line with our and Wall Street's expectations. Too, the showing from its industrial segments was strong. This is likely the primary reason why its shares are up about 2% in early trading.

On the revenue line, the company posted sales of $34.2 billion. Estimates ranged from that figure to as high as $34.5 billion, and the number was off from last year's tally of $34.8 billion, but investors are well aware of the company's efforts to simplify the portfolio. Therefore, an emphasis on the top line is not evident at this point. The 2013 amount includes contributions from NBCUniversal, which was sold off, as well as a number of other entities that have since been discontinued and/or divested. The plan is to get back to GE's industrial roots, and the Street should be pleased with the 8% revenue growth on a year-over-year basis. Moreover, some areas really shined; demand for oil and gas equipment, jet engines, and power and water turbines was particularly stout.

From an earnings standpoint, first-quarter earnings were $0.33 a share, a penny better than our call and in line with the general consensus. Some early headlines were indicating that earnings had fallen sharply from 2013's start. Numerically, that is true; however, the $0.39 put up last year included handsome contributions from segments that are no longer in the portfolio, so the comparison is not only ill-conceived, it fails to take into account the strides that General Electric is making.

Forward-looking comments made by management have us upbeat about the rest of 2014. GE has an unparalleled view of the world economy, as its factories and manufacturing plants are everywhere. When it makes remarks, the rest of the market listens. With that, leadership stated that European operations had perked up over the last three months and the outlook was positive. Too, and as we expected, developing nations continue to be a strong source of growth. The company cashes in on infrastructure buildouts and emerging markets' desires to get in line with more developed countries. If a large project to industrialize a country is under way, there is a strong chance that GE will be profiting in some way, shape, or form. Here at home, domestic business spiked in the month of March, a welcome sign after a slowdown through the harsh winter.

Elsewhere, the push to return to an industrial-based company continues in earnest. GE Finance was a proven moneymaker for years for this conglomerate, but what it does to the overall risk profile was on display during the most recent financial downturn. Management assured shareholders it would slant the portfolio away from finance-related matters and it has been doing so of late. Most would call it a restructuring, but the in-house term is “simplification”. The next step in this procedure is a large one; later this year the consumer credit card arm will be spun off via a public offering. Support for this maneuver is high, and almost everyone on board is behind management's efforts to build around large, complicated industrial projects. Main areas of focus going forward are clear: aircraft engines, power plant turbines, and oil and gas equipment.

Still, GE is a large, diversified company, and the true progress of this transformation probably will not be visible until 2015 at the earliest. In the meantime, efforts are focused on cutting costs so when the simplification is over, profits can rise sharply. In the first quarter, expenses were slashed by $254 million, which puts the $1 billion target for full-year 2014 in view.

Looking out to the balance of 2014, we are leaving our estimates unchanged at this point. Our call is for revenues of $150 billion to translate into a bottom line of $1.70 a share. Neither figure is all that impressive from a year-over-year standpoint, however, one must always keep in the back of his/her mind the sizable transformation that is ongoing here.

With that, we continue to think GE shares are fairly valued for the near term. Regardless, this blue chip is the type of holding that many long-term portfolio can be built around. The company's history and credentials are unmatched in the investment world. Too, total-return seekers should note the equity's steadily rising and well-supported dividend.

About The Company: Founded in 1892, General Electric Company has grown into one of the largest and most diversified industrial companies in the world. With products ranging from aircraft engines, power generation, oil and gas production equipment, and household appliances to medical imaging, business and consumer financing, and industrial products, it serves customers in more than 100 countries. On a geographic scale, more than half of General Electric’s revenues came from overseas in 2013.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.