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General Electric (GE Free General Electric Stock Report), one of the largest and most diversified technology and financial services corporations in the world, has reported third-quarter results that were a bit shy of consensus expectations. Still, the company displayed strong growth in several end markets, continued its slow-but-steady transformation away from financials and back to its industrial roots, and boasted an impressive backlog. And, investors applauded the release and bid the shares up to a new 52-week high, above $25 a share.

Share net came in at $0.36, identical to the figure from the like period of 2012 and the sequential reading from the second period. This number was a penny below what we were expecting, but a penny above the consensus on Wall Street, which had come down a bit in recent days. No guidance was provided for the full year, but we will be maintaining our $1.65-a-share target, which would represent a 9% year-over-year gain.

The top line was a slightly different story, although we feel the need to point out that due to the unwinding of GE Capital, comparisons here have not been pretty for some time and the investment community has cast a blind eye to this trend with good reason. Revenues for the September interim were $35.7 billion, below our call of $36 billion, and a 1% decrease from last year's level. A negative foreign exchange impact of $132 million drew most of the blame for the shortfall, but decreasing contributions from a dwindling GE Capital cannot be ignored. Investors do not mind this one bit, however, as this entity gets most of the blame for GE's struggles at the height of the financial crisis in 2008. In sum, we are shaving $200 million from our full-year 2013 revenue expectation. That number now sits at an even $146 billion.

It is no surprise that a small revenue miss goes unpunished, because to harp on that would make one miss out on the true resurgence in operations that General Electric is experiencing. A return to the industrial operations on which the company thrived for decades is paying off handsomely. Six of the seven industrial units that the company breaks down statistics for posted double-digit gains in the September quarter. Oil & Gas and Aviation led the way with increases of 18% and 12%, respectively. In fact, the only down division was Power & Water, which saw a 10% drop in revenues, but even this comparison was a vast improvement from recent sequential numbers. Moreover, this branch posted a 9% rise in earnings, a figure that caught most analysts pleasantly off guard. The division sells a variety of turbines, and prospects heading into 2014 have improved markedly of late.

Moreover, orders in the three-month period were stout. Total orders jumped 19%, to $25.7 billion. The backlog of equipment and services was up $6 billion sequentially, to an all-time high of $229 billion. Highlighted deals in the term were a $1.9 billion pact to sell six gas-fired power plants to Algeria, a commitment of aero engines from Lufthansa of Germany equating to $2.5 billion, and a $600 million agreement to provide more equipment to the Yamal liquefied natural gas project in Russia.

Margin performance in the quarter also underscored why the bulls came out following this earnings release. Management was quick to point out that the target of $1 billion in cost savings set for 2013 has already been met. That goal will now undoubtedly be exceeded, and even more trimming is anticipated for 2014. The profit margin on industrial businesses as a whole improved 1.2% versus the same time last year. Too, a plan to get operating profits on industrials to rise 0.7% this year, to 15.8%, is on track.

From an investment perspective, we think GE stock makes an excellent cornerstone for any portfolio. The blue chip is in the process of painting a beautiful turnaround picture and is the healthiest it has been in some five years. It provides a steadily growing and well covered dividend for those seeking income, and aspirations for 3- to 5-year appreciation potential are running ahead of the Value Line median. Of note, GE is the only remaining original member of the Dow Jones Industrial Average, having been founded by none other than Thomas A. Edison.

About The Company: Founded in 1892, General Electric Company has grown into one of the largest and most diversified industrial companies in the world. Its variety of segments include Energy Infrastructure (30% of ’12 revenues); Aviation (13%); Healthcare (12%); Transportation (3%); Home & Business Solutions (6%); and Capital Finance (31%). On a geographic scale, more than half of General Electric’s revenues came from overseas in 2012.

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