By Ted Mann and Michael Calia 

General Electric Co. said Friday that it expects to raise $3.1 billion in the sale of a 15% stake in Synchrony Financial as the conglomerate begins marketing the initial public offering of its North American consumer-finance arm.

The company, which also reported a 13% increase in its second-quarter profit, filed the so-called "red herring" prospectus document with regulators Friday and will start meetings with investors. The company is targeting the end of July for the listing of the business.

The company set the expected price range of 125 million shares at $23 to $26 each and said it would list on the New York Stock Exchange under symbol SYF.

The IPO appears set to be the biggest debut by a U.S. company this year so far, topping the $2.6 billion offering by Ally Financial in April. The stake GE retains in the business will be worth about $17 billion, valuing Synchrony at around $20 billion.

The sale of Synchrony is a crucial element of GE CEO Jeff Immelt's strategy to lead the company away from its long reliance on financial profits, and back toward its roots as one of the country's oldest and strongest industrial manufacturers that makes everything from jet engines to power turbines and locomotives.

Overall, GE said Friday that it is making "good progress" with its goals for simplification.

GE has shed its NBCUniversal media unit and moved to build up its energy and industrial portfolio. Last month, French engineering company Alstom SE agreed to sell the biggest part of its enterprise--its gas turbine business--to GE for $17 billion. The deal if completed would be GE's biggest-ever acquisition.

At the same time, GE is stepping up efforts to sell its low-margin appliance business, according to people familiar with the matter, a business GE planned to sell in 2008 before the financial crisis scared off buyers.

GE's industrial segment posted a 9% increase in profit during the latest period, along with wider margins.

"The environment continues to be generally positive," Mr. Immelt said.

Overall, GE posted earnings of $3.55 billion, or 35 cents a share, up from $3.13 billion, or 31 cents a share, year earlier. The company posted a $193 million provision for income taxes, down from $310 million in the prior-year period, and it narrowed its loss from discontinued operations to $41 million from $124 million.

Operating earnings rose to 39 cents a share from 36 cents a share.

Revenue improved 3.4% to $36.23 billion.

Analysts polled by Thomson Reuters had expected per-share operating earnings of 39 cents and revenue of $36.31 billion.

Write to Ted Mann at ted.mann@wsj.com

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