GE To Divest Assets That Are Missing Profitability Targets

Discussion in 'Stock Market Forum' started by PaulSchinider, Apr 18, 2014.

  1. PaulSchinider

    PaulSchinider Well-Known Member

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    General Electric Company is planning to sell out its businesses that are not returning a minimum of 10% profit on its revenues

    General Electric Company (GE) announced results for the first quarter of its fiscal 2014 (1QFY14), in which revenues and profits declined over last year’s comparable period. GE reported revenues of $34.2 billion for 1QFY14, a decline of 2% year-over-year (YoY). Adjusted earnings for the industrial conglomerate dropped 5.7% to 33 cents per share. The Industrial segment’s profit margin expanded by 50 basis points (bps) over the previous year to 12%, meeting its goal of a profit margin of at least 10%. The company is now looking to sell off its assets that are not meeting its minimum profit margin target.

    General Electric saw revenues in its largest segment, Aviation, increase 14% YoY to $5.78 billion, while profits were up 19% to $1.12 billion. The operating profit margin expanded by 90bps to 19.3%, the highest among all segments. The conglomerate’s second-largest segment, Water & Power, witnessed growth of 14% over the year-earlier period to $5.5 billion, while profits soared 24% to $888 million. The operating profit margin for the segment edged up 120bps YoY to 16.1%.


     
  2. jl1401

    jl1401 Member

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    Anyone can post negative information all day long about GE anytime they want. The bottom line is the stock is going to continue to perform as long as there is a stock market. Sure it was highly volatile during the recession and is still building. However, it has recovered and is the innovation in our technological future regarding energy. No way would I ever stop investing in GE. I go with the buy and hold strategy in my portfolio with this stock.
     
  3. GiltEdged

    GiltEdged Active Member

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    GE has just posted a 5% increase in earnings/share, so it is obviously doing something right during its restructure. It may be taking a hit on Oil and Gas, but it is still diversified enough to make it up elsewhere. For me, I'd have said this was a long term hold. It may have rocky times ahead, but I can't see it going anywhere and in the worst case someone will buy it.

    Even with the diversification, GE Aviation may have trouble after the news about the GEnx aircraft engines, which the FAA has just ordered replaced with older models due to icing problems with the new version. The engines were already restricted from use near thunderstorms, and has ice problems, so it seems this may be the last straw. It could cost GE Aviation quite badly if they have to replace them all.
     
  4. kgord

    kgord Senior Investor

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    There is a large GE plant located in my hometown. It has hung in there for years, even though most of the other large industrial companies left town a number of years ago. It was a shock to the local community that the plant was going to be closing down and moving to Mexico. It will be throwing hundreds of people out of work. Just another source of jobs leaving the U.S.
     

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