General Electric has posted record profits in the second quarter of the year, reaping $3.9bn.

This compares to $3.38bn for the same period a year earlier.

The firm raked in the profits despite the fact that its total revenues fell by 3% because of the global economic slowdown.

GE's businesses range from aerospace and appliances to financial services and broadcasting.

Growth in the power systems and aircraft businesses helped offset softer results from the manufacturing industry which has been hurt by a weak economy.

Welch to quit

Chairman Jack Welch also announced that he would retire as chairman of GE on 7 September, after more than 20 years at the helm.

Mr Welch, who joined the firm in 1960, is credited with transforming GE from a light bulb company into an international empire.

But his last effort - the takeover of Honeywell in what would have been the largest industrial takeover in the world - ended in failure.

Mr Welch had postponed his retirement from April in order to see the deal completed, but could not persuade the European Union's competition authorities to give the deal a green light.

"This just goes to show that you're never too old to get surprised," he said, commenting on his surprise at the stance of the EU.

Honeywell blues

The fate of General Electric is very different from its partner in the failed merger Honeywell.

GE's profits have continued to rise, proving that it is a profitable company with or without the added appendage of Honeywell.

Honeywell, however, reported a dramatic slump in annual profits of 92% in April and was forced to cut 6,500 jobs.

GE shares were 3.88% higher on the news at $46.34 at 1105 in New York.