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General Electric
General Electric Profit Climbs 15%, Led by Finance (Update1)
Oct. 14 (Bloomberg) -- General Electric Co.'s third-quarter earnings climbed 15 percent, bolstered by higher demand for products ranging from credit cards to jet engines and the sale of a stake in a mortgage- and life-insurance company.
Net income rose to $4.68 billion, or 44 cents a share, from $4.07 billion, or 38 cents, a year earlier, Fairfield, Connecticut-based General Electric said in a statement today. Revenue at the world's second-largest company by market value rose 9.4 percent to $41.9 billion.
Chief Executive Jeffrey Immelt is divesting insurance to focus on areas such as consumer finance and aircraft engines, which benefited from strong orders amid a rebound in airline travel. The company posted a gain of about $250 million in the quarter from the sale of 80 million shares of Genworth Financial Inc., reducing its stake to a minority interest. Profit rose at least 13 percent in all six of GE's business units.
``The businesses are in great shape,'' said Richard Steinberg of Steinberg Asset Global Management in Boca Raton, Florida, which owns almost 200,000 shares of General Electric. ``You have energy, transportation and healthcare with great backlogs.''
Profit matched the 44-cent average estimate of 18 analysts surveyed by Thomson Financial. On Oct. 6, General Electric raised its forecasts to 44 cents for the quarter and $1.81 to $1.83 for 2005. It expects 56 cents to 58 cents this quarter.
The Genworth gain helped offset about $377 million in losses from Hurricanes Katrina and Rita at General Electric's insurance businesses.
Market Cloud
Shares of General Electric rose 22 cents to $34.02 in New York Stock Exchange composite trading yesterday. They have dropped 6.8 percent so far this year and are down 14 percent since Immelt, 49, took over from Jack Welch in September 2001. That compares with a 2.9 percent drop in the benchmark Standard & Poor's 500 Index.
Exxon Mobil Corp. surpassed General Electric as the world's largest company by market value as record oil and gas prices propelled its shares 13 percent higher this year.
``GE is falling under the same cloud of the market as a whole,'' said James Fisher of Univest Corp. in Souderton, Pennsylvania, which manages about $900 million. ``Investors are not focused on the positives that are occurring like corporate profitability.''
Genworth
So-called organic revenue climbed 8 percent from businesses owned at least a year. It excludes sales from acquisitions and the insurance units. Total revenue was $38.3 billion a year earlier.
GE will no longer carry Genworth on its balance sheet and plans to exit the business by the end of 2006, Chief Financial Officer Keith Sherin said at the Oct. 6 investor meeting. GE raised $2.36 billion by selling shares in Genworth, reducing its stake to about 27 percent.
GE is the world's biggest provider of power-plant turbines, locomotives, jet engines, medical imaging equipment and private-label credit cards, and is the top aircraft lessor. Other businesses include security, plastics, water treatment and appliances, as well as media through its NBC Universal unit.
``While many companies are posting faster growth than GE in the near-term, GE is accelerating while most companies are decelerating,'' Citigroup analyst Jeffrey Sprague wrote in a note to clients Oct. 7. He rates the stock a ``buy.''
NBC Ratings
In June, the company reorganized its dozens of business lines into six main areas, down from 11, in the most sweeping restructuring since Immelt became chief executive. NBC Universal's revenue declined 26 percent, in part because it didn't have Olympics revenue like it did in the year ago period.
The unit's broadcast network, NBC, lost its top spot last year in the ratings and has continued to lose viewers this current television season, which started Sept. 19, according to Nielsen Media Research.
To contact the reporter on this story:
Rachel Layne in Boston rlayne@bloomberg.net
Last Updated: October 14, 2005 07:02 EDT
Oct. 14 (Bloomberg) -- General Electric Co.'s third-quarter earnings climbed 15 percent, bolstered by higher demand for products ranging from credit cards to jet engines and the sale of a stake in a mortgage- and life-insurance company.
Net income rose to $4.68 billion, or 44 cents a share, from $4.07 billion, or 38 cents, a year earlier, Fairfield, Connecticut-based General Electric said in a statement today. Revenue at the world's second-largest company by market value rose 9.4 percent to $41.9 billion.
Chief Executive Jeffrey Immelt is divesting insurance to focus on areas such as consumer finance and aircraft engines, which benefited from strong orders amid a rebound in airline travel. The company posted a gain of about $250 million in the quarter from the sale of 80 million shares of Genworth Financial Inc., reducing its stake to a minority interest. Profit rose at least 13 percent in all six of GE's business units.
``The businesses are in great shape,'' said Richard Steinberg of Steinberg Asset Global Management in Boca Raton, Florida, which owns almost 200,000 shares of General Electric. ``You have energy, transportation and healthcare with great backlogs.''
Profit matched the 44-cent average estimate of 18 analysts surveyed by Thomson Financial. On Oct. 6, General Electric raised its forecasts to 44 cents for the quarter and $1.81 to $1.83 for 2005. It expects 56 cents to 58 cents this quarter.
The Genworth gain helped offset about $377 million in losses from Hurricanes Katrina and Rita at General Electric's insurance businesses.
Market Cloud
Shares of General Electric rose 22 cents to $34.02 in New York Stock Exchange composite trading yesterday. They have dropped 6.8 percent so far this year and are down 14 percent since Immelt, 49, took over from Jack Welch in September 2001. That compares with a 2.9 percent drop in the benchmark Standard & Poor's 500 Index.
Exxon Mobil Corp. surpassed General Electric as the world's largest company by market value as record oil and gas prices propelled its shares 13 percent higher this year.
``GE is falling under the same cloud of the market as a whole,'' said James Fisher of Univest Corp. in Souderton, Pennsylvania, which manages about $900 million. ``Investors are not focused on the positives that are occurring like corporate profitability.''
Genworth
So-called organic revenue climbed 8 percent from businesses owned at least a year. It excludes sales from acquisitions and the insurance units. Total revenue was $38.3 billion a year earlier.
GE will no longer carry Genworth on its balance sheet and plans to exit the business by the end of 2006, Chief Financial Officer Keith Sherin said at the Oct. 6 investor meeting. GE raised $2.36 billion by selling shares in Genworth, reducing its stake to about 27 percent.
GE is the world's biggest provider of power-plant turbines, locomotives, jet engines, medical imaging equipment and private-label credit cards, and is the top aircraft lessor. Other businesses include security, plastics, water treatment and appliances, as well as media through its NBC Universal unit.
``While many companies are posting faster growth than GE in the near-term, GE is accelerating while most companies are decelerating,'' Citigroup analyst Jeffrey Sprague wrote in a note to clients Oct. 7. He rates the stock a ``buy.''
NBC Ratings
In June, the company reorganized its dozens of business lines into six main areas, down from 11, in the most sweeping restructuring since Immelt became chief executive. NBC Universal's revenue declined 26 percent, in part because it didn't have Olympics revenue like it did in the year ago period.
The unit's broadcast network, NBC, lost its top spot last year in the ratings and has continued to lose viewers this current television season, which started Sept. 19, according to Nielsen Media Research.
To contact the reporter on this story:
Rachel Layne in Boston rlayne@bloomberg.net
Last Updated: October 14, 2005 07:02 EDT
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