GE's Immelt Plans Deals In Financial Services Sector
General Electric CEO and Chairman Jeff Immelt Monday said the conglomerate would be making acquisitions in in the troubled financial services industry and seemingly ruled out a spin-off of the company's media unit, NBC Universal.
"We're going to do deals right now in financial services that will fuel earnings for years," Immelt told CNBC's Carl Quintanilla in an exclusive interview from the Beijing Games, which NBC is broadcasting. "If you've got some cash, if you have a strong balance sheet, this is as good of a time you're going to see."
"We made more than anyone else in the fourth quarter last year," he said. "We made more than anyone else in the first quarter last year, BofA [Bank of America ] was the only company that made more than us in the second quarter."
Immelt said the sector had stabilized from the "churn" of March, but added, "we still have some more chop ahead."
Immelt also appeared to dash long-running investor hopes that the company might sell NBC Universal.
NBC Universal's $900 million deal to broadcast the Beijing Games has been extremely successful, giving the NBC network its best ratings in years and attracting abundant advertising. "In a tough economy, we delivered," for investors and advertisers, Immelt said.
Immelt said NBC was still "critical" to the growth of NBC Universal, but highlighted the company's efforts to expand into cable TV and digital products and services and suggested such diversification would continue.
"I never intended selling it," he said.
Immelt's comments came in a wide-ranging interview, wherein he discussed the global and US economies, the financial services sector, the US consumer and the company's performance.
Immelt said he saw a "robust" global market with "booming" third-quarter orders. Global revenue, he added, was up 25 percent. He said the housing slump and dampened consumer spending continued to be drags on the US economy.
Given that combination, Immelt expects GE would to earn about $22 billion this year with EPS of $2.20-$2.30.
The company's stock price is up 14 percent from its low around the time it reported disappointing first-quarter earnings in April, stunning Wall Street for its failure to warn ahead of time. GE also lowered earnings guidance at the time.
"I think the concept of GE has gotten lost a little bit," he said. "It's not like we've got a firesale going on around the country."
In general, however, he sounded an extremely positive note about the company's business mix and prospects, including recent moves to diversify its stable of companies.
Immelt called NBC Universal's deal to broadcast the Olympics, a "win" for the parent company and the media unit, citing its multi-media platform presentation and overall packaging. (NBC Universal is the parent of CNBC and CNBC.com).
He explained that the deal played into GE's strategy of using "the Olympics as an infrastructure venue" had paid off. In addition to NBC Universal $700 million in revenue so far, the company notched $700 million in business directly or indirectly related to the Beijing Games. He expects GE companies to earn $500 million from the Vancouver Games in 2010 and the London Games in 2012.
"I like where we are right now," said Immelt.