GE Capital progressed with its strategy of a smaller, more focused financial services business with solid earnings. GE Capital earnings grew 9% in the quarter and ENI was $419 billion at quarter end. Commercial Real Estate grew net income to $0.8 billion while shrinking assets by $15 billion. GE Capital Corporation (GECC) paid a $1.0 billion dividend to the parent in the quarter, bringing the year-to-date total to $6.4 billion. Its Tier 1 common ratio remains strong at 10.2%.
Cash generated from GE operating activities rose 48% to $17.8 billion for the year, with strong Industrial CFOA of $6.2 billion, and total GE CFOA of $7.2 billion, in the fourth quarter. GE ended the quarter with $77 billion of consolidated cash and cash equivalents.
GE continued to execute on its balanced capital allocation plan. The Company’s strong cash position enabled the repurchase of $2.1 billion of stock during the fourth quarter and $5.2 billion of stock for the year. For 2012, GE returned $12.4 billion to investors through dividends and buybacks. In December, GE’s Board of Directors raised the Company’s dividend 12% to $0.19 per outstanding share of the Company’s common stock, the fifth increase in three years.
Also during the quarter, GE announced an agreement to purchase the aviation business of Avio S.p.A., an Italy-based manufacturer of aviation propulsion components and systems, for $4.3 billion, a multiple of approximately 8.5x estimated 2012 earnings before interest, taxes, depreciation and amortization. The acquisition of Avio’s aviation business, which provides components for GE Aviation and other engine companies, would further GE’s participation in jet propulsion, one of the most attractive sectors of the aviation industry.Immelt concluded, “Facing an uncertain fiscal environment, the GE team had strong fourth-quarter execution. With our strong backlog and good momentum in margins, we are well-positioned to achieve our 2013 framework: double-digit earnings growth and solid organic revenue growth for the Industrial segment, significant cash returned to the parent company from GE Capital, further margin expansion, and returning cash to shareholders.”
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV