GE's Immelt Forecasts Profit Growth And More
General Electric is affirming its earnings estimate for this year and forecasting profit growth of 10-13% in 2007. The parent company of this network also boosting its quarterly dividend by 12%. This morning-- GE Chairman and CEO Jeffrey Immelt spoke with the "Squawk Box" team – explaining how he'll deliver a "high-visibility, low-risk" year.
Immelt said 80% of GE’sbusiness is in infrastructure, healthcare, and consumer and commercial finance business. He called them high visibility, high growth businesses – and said they’re positioned to be able to grow in slower times.
Looking to next year Immelt said, “I think you have to look at the business segment by segment – infrastructure and health care will be the same next year – NBC will be better, industrial maybe slightly worse and financial services – we’re guiding at 10-15%.”
Here are some of the other talking points from what Immelt said:
How do you strike a balance between organic growth and acquisitions? - "Acquisitions always have to be part of the mix, but organic growth is powerful as well. Overall, GE can grow 2 to 3 times GDP."
Does the market undervalue GE stock? – "Investors are smart and themes come and go – the last few years there’s been very little risk premium in the market.. in an environment where people are concerned about risk and a slowing global economy – that very much favors GE."
If the U.S. falls into recession would it derail the global economy? - "A year ago the US consumer was the only engine of global growth – now you see the European economy growing – consumer led. You see the same in Japan. I think the global economy is somewhat less leveraged on the US consumer than it has been in the past. On a relative basis the European consumer feels more wealthy today."
Is the right team in place at NBC – "Yes. I love the team that’s in place now. I couldn’t be happier with the progress that we’ve made. I just like the way the company is positioned right now."
What are you looking for in China? - "I think China has more growth ahead. Hank Paulson is broadly respected and I’m very optimistic on what Hank will be able to do to make sure relations between the US and China will remain on solid footing."
Outside China, where else do you see opportunity? - "Follow the oil money – GE gas turbines and wind turbines (will become more valuable) as oil scarcity becomes more of an issue. Our footprint around the world is growing substantially and I think that’s going to go on."
For more from Jeff Immelt – Check out David Faber’s interview only on cnbc.com
Parts 1 & 2 of the "Squawk Box" interview with Jeff Immelt: