I commenti alla trimestrale di GE. Il fatto che non ci siano sorprese, dice un analista, è già una buona notizia.
GE Profit Drops 43% as Immelt Backs Dividend, AAA (Update3)
By Rachel Layne
Jan. 23 (Bloomberg) --
General Electric Co. posted fourth- quarter profit in line with analysts’ estimates and Chief Executive Officer
Jeffrey Immelt repeated the company has the resources to pay the shareholder dividend and support its AAA credit rating.
Profit from continuing operations declined 43 percent to $3.87 billion, or 36 cents a share, amid the global credit crisis that eroded income at the finance segment. Per-share profit before the payment of preferred dividends related to a stake owned by
Warren Buffett’s Berkshire Hathaway Inc. was 37 cents, meeting analysts’ estimates.
GE this week traded the lowest since 1996 as investors questioned the ability to protect both the AAA credit rating and the
dividend amid a deepening recession. Immelt is shrinking the finance unit to 30 percent of profit from more than half in 2007. The company added to reserves and tripled cash on the balance sheet to $48 billion. Orders in the infrastructure divisions slipped in the quarter even as the total backlog rose last year.
“
No surprise is good news for General Electric and for the market,”
Henry Smith, chief investment officer of Haverford Trust Co., said today in Bloomberg Television interview. “We will continue holding General Electric. It is an incredible global company with incredible customers. It’s being oversold.” The Radnor, Pennsylvania-based firm owned about 4 million GE shares as of Sept. 30, according to
Bloomberg data.
Revenue fell 4.8 percent to $46.2 billion from $48.5 billion in the year-earlier quarter, the Fairfield, Connecticut-based company said today in a statement. The equipment and service backlog rose 9 percent to $172 billion. Year-earlier profit was $6.83 billion, or 68 cents a share.
GE Capital
GE declined 42 cents, or 3.1 percent, to $13.06 at 9:42 a.m. in New York Stock Exchange composite
trading. On Jan. 21, it touched a 13-year low of $11.88. The shares have dropped 60 percent in the past year, exceeding the 37 percent slump in the Standard & Poor’s 500 Stock Index.
GE is the world’s biggest maker of power-plant turbines, jet engines, locomotives and medical imaging equipment. The company also owns NBC Universal and finance units include real estate, the world’s biggest aircraft lessor, middle-market and bankruptcy lending as well as private-label credit cards. During the quarter, it won a $3 billion order for power-plant turbines and services from Iraq, its largest ever.
Immelt told investors Dec. 16 GE can sustain both the AAA and dividend in part because the finance business may have as much as $5 billion in profit this year and GE may generate as much as $16 billion in cash after capital expenses, mainly from the sale of industrial goods like jet engines and power turbines. That would be more than enough to pay the $13.4 billion dividend.
‘Got the Cash’
GE today repeated the December forecast for non-finance divisions collectively to have a profit gain in 2009 of no more than 5 percent, while GE Capital will decline to about $5 billion in profit. GE announced last month it would cease making per- share profit forecasts this year.
“I hate the fact that there’s so much speculation around the dividend and AAA,” Immelt said in an interview today on the company-owned CNBC television network. “I wish my words could end the speculation. The facts of what we’ve done here, I think, should let investors know that we’ve got the cash, and we’ve got the operating model that’s going to secure the dividend in this environment.”
GE had $48 billion of cash on its balance sheet at the end of 2008, compared with $16 billion at the end of the third quarter, the company said. General Electric used $5.5 billion of its $15 billion stock sale in October to bolster GE Capital’s balance sheet, reducing the leverage ratio to 7-to-1.
Credit Losses
On Dec. 18, Standard & Poor’s cut GE’s outlook to “negative” from “stable” and said the company had a one-in-three chance of losing its top rating over the next two years as earnings deteriorate.
“We remain committed to the AAA,” Immelt said on a conference call today with analysts and investors. “The dividend is a good return to investors in this environment of uncertainty, but we’re not straining to pay it.”
The payout is being held at $1.24 a share for 2009, the first year in more than three decades without an increase. It currently yields about 9.6 percent.
The company wants to “stick it out” in finance, Immelt said in the CNBC interview. He said still sees lowering GE’s commercial-paper balance to $50 billion in 2009.
General Electric sees $10 billion in credit losses in 2009, $1 billion more than its prior view, the company said the call.
Total
revenue in 2009 will be unchanged or down 5 percent from last year, according to a slide presentation on GE’s Web site. Using the $182.5 billion in total revenue the company reported today, that equates to $173.4 billion to $182.5 billion, compared with the consensus estimate of $179.6 billion.
To contact the reporter on this story: Rachel Layne in Boston at
[email protected].
Last Updated: January 23, 2009 10:07 EST
) quotando questo post del Negus che secondo me mette bene a fuoco, nella prima parte, i problemi di General Electric, ma anche la circostanza per cui il management si sta muovendo con una certa lena con l'intenzione di ridurre il leverage.
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