GE Expects 2007 Profit of $2.17 to $2.23 a Share
General Electric said it was raising its quarterly dividend by 12%, and that it expects to report a profit of $2.17 to $2.23 per share in 2007.
Analysts had expected $2.24 next year at the world's second-largest company by market value.
"Global economic growth continues," GE Chairman and Chief Executive Jeff Immelt told investors in New York. "Our orders outside the United States are very strong, Europe is particularly strong right now. Housing and auto have definitely been impacted by interest rate increases."
GE's size and breadth -- its businesses range from building jet engines, to commercial finance, to NBC Universal media -- make it a barometer of the U.S. economy. GE is the parent company of CNBC.
Immelt said the company's diversification would allow it to hit its targets even in an economic slowdown.
"We are going to be able to hit it even if the economy slows, because of the strength that we have in businesses like infrastructure," Immelt said.
The diversified conglomerate also reaffirmed its outlook for its 2006 fourth-quarter and full year earnings. It said it still expects earnings of 62 to 64 cents a share for the fourth quarter, and $1.97 to $1.99 a share for the year 2006.
Analysts were expecting 64 cents and $1.98, respectively for the fourth quarter and 2006, according to Reuters Estimates.
GE also raised its quarterly dividend to 28 cents a share from 25 cents, for a full-year dividend of $1.12 a share, up from $1.00 a share. The dividend is payable Jan. 25 to shareowners of record on Dec. 26.
The company also said it expects to deliver another year of strong revenue growth.
"This has been a stock that has been lagging the market for a while, and this clarity on their outlook and visibility of their earnings is being greeted favorably by the market," said Tim Ghriskey, chief investment officer at Solaris Asset Management. "The increase in the dividend is a statement by management and the board that they are comfortable with the performance of the company both today and going into next year."
GE shares, which edged slightly higher after the news, have lagged the broader market in a year when the blue-chip Dow Jones industrial average has hit record highs. By afternoon, they were up 0.3% for the year, lagging the 15% rise of the Dow.
"The dividend is growing along with earnings growth," said David Katz, chief investment officer at Matrix Asset Advisors. "The stock is poised again to do better."
The Fairfield, Connecticut-based company is the first of a trio of top U.S. manufacturers due to issue their 2007 financial forecasts this week. Next up are United Technologies and Honeywell International .