GE reports third quarter 2009 earnings
Today, GE reported third quarter 2009 earnings from continuing operations (attributable to GE) of $2.5 billion, or $0.22 per share, including the effect of $0.05 in restructuring and other charges, down 51% from the third quarter of 2008. Industrial segment profit grew 4% in the quarter compared to the year-ago period. Cash generated from GE Industrial operating activities totaled $4.4 billion in the quarter and $11.5 billion year to date, up 1%. Total company backlog of equipment and services grew 2% to $174 billion over the prior quarter.
“In a global economic environment that is beginning to slowly recover, GE delivered solid third-quarter business results,” GE Chairman and CEO Jeff Immelt said. “We continue to execute on our plan at Capital Finance, perform well in a slow-growth industrial environment and strengthen the balance sheet with strong cash generation. We are aggressively controlling costs, increasing our industrial backlog while expanding margins, and capitalizing on strong services performance.”
* Read GE’s press release
* Watch this morning’s 8:30 a.m. presentation via a webcast
GE Theater’s lost Zsa Zsa hit
The ‘Warbirds’ of Oshkosh
We do not believe one word that Immelt and Sherin states!
Wake up America!
When you say “we,” speak for yourself. Book value in the quarter grew by 4.92%. From 10.56 to 11.08. Thus, whether you like it or not, this company IS growing. The question then becomes, how much of a premium do you want to pay over net asset value?
My ceiling is 1.5, or a market price of 16.62. At 16.62, 66% of your cost basis basis is covered in net assets. Once the company gets it’s ROE back up to a more normal 15%, ( which it is very close to doing, as the 1998-2008 average net income is right around 16 billion, compared to 15 billion of cash flow for 2009) then the p/e ratio on the stock, at this market price is right around 11, or roughly 9%, to cost. Over a 10 year holding period, a 9% cost basis is VERY GOOD. For the odds of a favorable result are quite high.
Cash doesn’t yield this much, neither does bonds, real estate or the s&p 500.
If more people would ask the basic question of “how much?” before they bought or sold something, we would all be better off as investors.
Thomas Edmonds
I, unlike “WE”, agreed with Mr. Edmonds, do your research. Having said that, “I” think GE is a solid buy, and if you own it, hold on to it. If it can break through $17.00, (I know, today’s earnings has set it back), it may well take out the 52 week high.
My covered calls expired worthless it looks for today. So another dividend in addition to the GE 10 cent dividend.
I am reinvesting the covered call premiums and the dividends back into GE so I can compound. I have a 30 year outlook.
When will the GE Board ever step up to the plate and get rid of ineffective management starting with Immelt? You can try to put as much lipstick on this pig as you want, but this performance is dismal and the underlying pig is still an ugly pig.
Thank you, Harry Maier….You nailed it to the nose!
Friday, October 16, 2009
General Electric; Jeff Immelt: FAIL (GE)
http://climateerinvest.blogspot.com/2009/10/general-electric-jeff-immelt-fail-ge.html
I’ve been asked why I am so negative on GE. The short answer: The wealth destruction that this company has visited on it’s shareholders is simply breathtaking.
On the day Jeff Immelt took over as CEO, September 10, 2001, the stock closed at a split adjusted $30.13. In early pre-market trade this morning it is changing hands at $16.31.
That is a compounded rate of just under negative eight percent per year.
Is it any wonder that GE has decided their future lies in lobbying the government to mandate their products? From light bulbs, where they and Phillips basically wrote the law that will ban incandescent lamps, in the process shutting down all U.S. manufacturing and shipping the jobs to China, to lobbying for the $300 million “Cash for Refrigerators” that starts later this month, to lobbying to stall the cleanup of the Hudson of their PCB waste, to lobbying for the hog-trough of giveaways that is cap-and-trade, these folks epitomize Immelt’s statement:
It’s never been a free market; it’s never gonna be a free market. That’s just the way it is….
Here’s OpenSecrets on GE’s lobbying expenditures.
Do I need to say more….Thomas edmonds, Gary Johnson and Longterm Investor????
I sold all my GE stock the day that Immelt place the GE Appliances business for sale…Immelt’s biggest and stupiest mistake…how can you place the company name business for sale???
Execellent questions after the presentation, but very poor answers from Immelt and Sherin! I think, depending on unemployment, maybe does not justified a good rating about GE!
Folks let’s face it….the world needs new DOGS at GE Capital to run this messy ship.
Thanks for listen.
Investor gone wild, your post doesn’t make any sense.
The day Mr Immelt took over as CEO, I had a whopping 50 shares of GE stock. My cost basis was around 50. Today, I have 1,927 shares. My cost basis is currently somewhere around 18. I don’t know what you’re doing, but my position since 2001 has grown by TEN FOLD. I didn’t start adding to my position aggressively until this year. Thus there is absolutely NO correlation between “investment performance” and Investor Return.
Since you are no longer a GE shareholder, why don’t you start acting like a grown man, stop crying, and get on with the rest of your life. After all, according to your most recent post, you haven’t held any shares in over 8 YEARS!
To: Thomas edmonds…You don’t make any sense. The GE Appliances business was place for sale in 2008 by Immelt….Get with the Program Mr. edmonds!
I don’t need to cry about GE!
What does the appliance business have to do with the fact that you are complaining about a stock you have not held for more than 8 years?? Like most people, you consistently place all of your focus on the WRONG variable. If CNBC and the NYSE shut down tomorrow for the next ten years, you would have no idea how to measure or quantify your investments. That, Sir, makes you an idiot. It’s not management’s fault that you paid such a ridiculously high price for your shares back in 2001, and then watched them fall. That fault belongs to you. No LONG TERM investor in his right mind is going to sell a business for less than 1.5 times book value, when the underlying assets are growing at an annualized rate of 15%. Year to date, GE has grown its book value by 11%. From 9.98 on December 31st, to 11.08 a share as of the end of the 3rd quarter. 16.17/11.08 = 1.46. Your posts are yet another example why a mere 3% of the population controls a whopping 70% of the wealth in this country. Everyone loves a sale, except when there’s one on wall street.
Anyone who thinks that GE is going to get back to pre Immelt is cluless.
After 8 plus years the only thin Immelt has done is continue to destroy the lifelong savings of many while making himself rich.
There is no doubt that JI and the BOD are crooks who could care less for the shareholder.
JI and his cronies, including the BOD should all be replaced.
Thank you Jack Black…you hit it right on the Nail. Lies after lies! Let’s face it…All upper management are doing each other a favor…
GE Capital Shrink “Faster” Than Planned….The below article say it all about GE!
http://www.thestreet.com/story/10612741/1/ge-capital-shrink-faster-than-planned.html?cm_ven=GOOGLEN
FAIRFIELD, Conn. (TheStreet) — General Electric(GE Quote) Chairman and CEO Jeff Immelt defended shrinkage in the company’s financial unit Friday, as profits in the division fell by 87% versus the third quarter of last year.
“We’re shrinking GE Capital faster than we’d planned,” Immelt said during a somewhat tense Q&A session with analysts. “We think that’s on strategy. We view this as being a positive execution point.”
Immelt made the comment during a pause in the conference call after Goldman Sachs analyst Terry Darling seemed to looking for a discrepancy between GE Capital’s performance and earlier forecasts.
GE executives had said earlier in the call that they expect GE Capital to be profitable for the year, noting it has earned $2 billion so far through the third quarter. Asked for more detail by Chris Glynn, an analyst at Oppenheimer, GE CFO Keith Sherin said simply: “No.” Then he reminded Glynn the company does not give quarterly guidance for the unit.
Morgan Stanley analyst Scott Davis noted GE’s loss provisioning is less than most banks, asking Sherin to explain the discrepancy. Sherin initially said GE’s portfolio is different from that of banks, but as Davis persisted, Sherin said: “We’re not going to comment on [what] banks do versus what we do.” In a report sent shortly after the call, Davis reiterated his “overweight” rating on the company, noting that GE is generating more cash than he had forecast. As for GE Capital, he wrote “provisioning improved in the quarter but remains too light in our opinion.”
The questions on the provisioning issue continued however, with Bank of America-Merrill Lynch analyst John Inch asking whether GE planned to set aside more capital in the future against losses. GE executives were non-committal , but defended the provisioning they have done so far as more than adequate.
GE Capital, which has grown dramatically over the past decade, has become the most controversial segment of the parent company’s business, and analysts and investors vary widely in their view of the extent of unrealized losses in its loan portfolio . Immelt has made a commitment to shrinking the business and returning GE to its industrial roots.
Third-quarter revenue for the unit totaled $12.2 billion, compared to $12.8 billion in the second quarter, and $17.2 billion in the third quarter of 2008.
GE shares were down more than 5% to $15.94 Friday morning. It earned 27 cents a share for the third quarter), above the 20 cents forecast by analysts surveyed by Thomson Reuters but total sales came in short of Wall Street’s expectations.
Now if anyone can’t read between the above lines…you should do need help!