General Electric Co. (GE) Chief Executive Jeff Immelt cautioned Friday that the economic recovery likely will be gradual but noted that conditions have "definitely improved" since a second quarter he viewed as "potentially the low-spot" for new orders.

Immelt, speaking on a post-earnings conference call with analysts, also said plans to shrink the conglomerate's loss-making GE Capital finance arm are ahead of plan.

The industrial and financial bellwether reported a record $174 billion backlog, with cash flow from its array of units countering weakness at the shrinking financial arm.

Immelt said charge-offs on the finance arm will likely peak in mid-2010, though he remains cautious about real-estate losses and the effect of rising unemployment on consumer lending.

The company noted that it is confident GE Capital will be "grandfathered" under proposed new regulations that some investors have feared could force it to split off the financial unit.

Chief Financial Officer Keith Sherin said GE is tightening ties with the unit to help head off any lingering regulatory threats. He said GE Capital's parent will extend fixed-charge covenants with the unit beyond their present three years, and make some other changes.

Immelt focused on expectation of sequential-order growth in the fourth quarter as he outlined "signs of life" in the economy.

The company reported $18.4 billion in orders for new equipment and services, such as maintenance, during the third quarter, up slightly from about $18 billion in the second quarter.

GE's order backlog climbed to $174 billion, up 3% from the second quarter. Immelt said the backlog "should give our investors some comfort in terms of visibility into the future."

He also said GE hasn't seen much impact yet from government stimulus programs, although he said the company should start seeing it in the fourth quarter.

Immelt declined to comment extensively on GE's plans for NBC Universal. He previously confirmed that talks are under way to merge NBC Universal with Comcast Corp.'s (CMCSA) television networks.

He noted Friday that GE has "always evaluated our portfolio," saying "this year we just wanted to be ready for several scenarios."

Vivendi SA (VIV.FR) owns a 20% stake in NBC Universal and has an option to sell it every year between mid-November and early-December until 2016.

Meanwhile, GE executives reiterated that GE Capital may need an infusion of $2 billion to $7 billion in 2011, although they said it won't need to seek outside capital for the funds.

GE said overall delinquency rates in its consumer-loan portfolio appear to have "leveled off" in the third quarter at 4.78%, up from 2.74% a year ago.

Delinquencies in its commercial real-estate portfolio have climbed to 4.19%, up from 0.19% a year ago.

Sherin said the company has pre-funded about 90% of GE Capital's long-term debt funding target of $35 billion to $40 billion for 2010.

GE shares were off 2.5%, or 44 cents, at $16.35 in recent trading.

-By Bob Sechler, Dow Jones Newswires; 512-394-0285; bob.sechler@dowjones.com