GE Reports Profit of 64 Cents a Share, In Line With Estimates
General Electric reported higher fourth-quarter earnings, boosted by stronger sales at all units except its GE Industrial division.
Performance at the Industrial unit was hurt by weak results at its plastics business, which is up for sale, the company said.
GE, which is the parent of NBC Universal and CNBC, also restated its earnings dating back to 2001 as a result of a change in the way it accounts for interest-rate swaps. The cumulative effect of the restatement was a $343 million reduction in earnings over the five-year period. The restatement had no impact on the latest fourth quarter results.
The restatements also have no impact on GE's liquidity and are expected to be slightly positive for its earnings over the next 10 years, the company said.
GE, with operations ranging from jet engines to commercial lending, said net income came in at $6.58 billion, or 64 cents a share, compared with $3.16 billion, or 56 cents a share, a year earlier.
The results were in line with analyst estimates, according to a survey by Thomson Financial.
Revenue rose 11% to $44.62 billion from $40.31 billion a year earlier. That was stronger than the $44.18 billion in revenue analysts had predicted, according to Thomson.
"With strong performance at Infrastructure, Healthcare, and the financial services business, GE delivered double-digit growth in earnings and revenues for the quarter and the year," said Chairman and Chief Executive Jeff Immelt, in a written statement.
"NBC Universal's turnaround is advancing and Industrial had a good year in spite of continued commodity inflation and competitive challenges at Plastics," Immelt said.
Profits rose at the NBC Universal business after a year of declines.
GE narrowed its forecast for 2007, saying it now expects to earn $2.18 to $2.23 a share, compared with its prior estimate of which implied earnings would be in the range of $2.17 to $2.25 a share.
On average, analysts are expecting earnings this year to be $2.22 a share.
For the first quarter, the company predicts a profit of 43 cents to 45 cents a share. Analysts expect GE to hit the high-end of that forecast with average estimates of 45 cents a share.
The Fairfield, Conn., company has been active on the deal front so far this year, disclosing plans for $14.83 billion worth of takeovers, including some businesses of Abbott Laboratories, the aerospace business of Britain's Smiths Group and Houston-based oil and gas fields
equipment maker Vetco Gray.
The deals come as GE attempts to sell its plastics division. This unit is one of the few laggards in the company's operations over the past year. In December, GE Chief Executive Jeffrey Immelt said he doesn't expect the business to rebound this year.
On CNBC's "Squawk Box," former GE Chairman and Chief Executive Jack Welch said he hoped the plastics division could be sold for $10 billion or more. This business has been hurt by raw materials costs and competition. The amount of cash such a deal could bring has led to the speculation that GE may be ready to make a large deal, potentially worth tens of billions.
Since taking the helm of GE, Immelt has sold a number of slow-growth businesses, and bulked up its faster-growing operations.
On Thursday, GE agreed to buy two diagnostic units of Abbott for $8.13 billion, broadening GE's $16 billion Healthcare business.
And earlier this week, GE agreed to pay $4.8 billion for Smiths Group's aviation unit. This deal will take GE's aviation business beyond engines and into electronic instrumentation.
Earlier in the month, GE announced plans to by Vetco International for $1.9 billion. This acquisition will help bulk up a GE unit that is growing on the strength of higher oil prices in recent years.
Separately, GE reaffirmed that it still continued to expect it will buy back between $5 billion and $7 billion in stock this year. However, the company said the plan will be "back-end loaded."