GE (GE): It Would Be Hard To Be More Disappointed
January 23, 2009 by Douglas A. McIntyre
The market has been pushing down GE (GE) expectations for weeks. It has taken the stock to a multi-year low and left investors thinking that the big conglomerate would be crippled by its financial unit and slow growth in it infrastructure. Some analysts do not see a recovery until next year.
GE posted numbers that were worse than expected. For the year, revenue was $183 billion, up 6%, and earnings were $18.1 billion, down 19%. For Q4 net income dropped 46% to $3.65 billion, $.35 a share, from $6.97 billion, or $.66 a share in the same quarter last year. The quarterly numbers included $1.5 billion of after-tax restructuring and other charges
GE insists that it capital position will make it nearly certain that the company can keep its "AAA" rating. If its results worsen that still may not be true.
GE’s real trouble is that too many of its divisions fell apart at the same time last quarter. It largest division, Technology Infrastructure, grew only 1% in both revenue and operating income. It Capital & Finance and Commercial & Industrial units each lost 17% of their revenue compared to the same quarter last year,
Capital Finance operating earnings dropped 67%.
GE said 2009 would be "extremely difficult". Based on its Q4 results, that may be an understatement. It will keep its dividend, which some fears it would cut, but that is cold comfort.
Douglas A. McIntyre
Sponsored: Want to Retire Early? Here’s a Great First Step
Want retirement to come a few years earlier than you’d planned? Orare you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.