This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

General Electric Beats With Revenue Jolt (Update 2)

In the Aviation segment, fourth-quarter revenue was $5.467 billion, increasing from $4.781 billion the previous quarter, but declining from $4.924 billion a year earlier. Fourth-quarter segment profit was $1.039 billion, compared to $924 million in the third quarter, and $850 million in the fourth quarter of 2011.

Healthcare revenue during the fourth quarter totaled $5.183 billion, increasing from $4.307 billion the previous quarter, and $5.163 billion a year earlier. Profit for the segment was $1.021 billion in the fourth quarter, increasing from $620 million billion in the third quarter, and $953 million in the fourth quarter of 2011.

GE Capital

GE Capital's fourth-quarter revenue totaled $11.770 billion, increasing from $11.369 billion the previous quarter and $$11.577 a year earlier. Fourth-quarter profit for the finance segment was $1.808 billion, compared to $1.679 billion in the third quarter, and $1.660 billion in the fourth quarter of 2011.

Following the $1.0 billion payment to the parent company, GE Capital's Tier 1 common equity ratio was 10.2% as of Dec. 31, which was the same ratio as in the previous quarter. GE Capital paid dividends totaling $6.4 billion to the parent company during 2011.

Parent and Stock

The company said it returned $12.4 billion to shareholders during 2012, through dividends and $5.2 billion in share buybacks.

General Electric's shares closed at $21.30 Thursday, up 1.5% year-to-date. The shares returned 21% during 2012, following a 1% return during 2011.

The company on Dec. 14 raised its quarterly dividend by two cents to 19 cents, for a yield of 3.57%, based on Thursday's closing price.

The shares trade for 12.7 times the consensus 2013 EPS estimate of $1.67. The consensus 2014 EPS estimate is $1.84.

Analyst Reaction

JPMorgan analyst Steven Tusa said in a note before the market open that the quality of General Electric's fourth-quarter earnings "was generally solid with revenues +3% vs JPM (+1% vs Consensus), Industrial margins better (+20bps vs JPM), GE Capital in line (with a 6% tax rate higher than expected) and the net of corporate/tax in line with our model."

With Immelt having carefully reduced his guidance for GE's 2012 organic growth in December to 8% from his 10% estimate in September, Tusa said "expectations were as low as they've been for some time," reflected by the relative underperformance of the shares, and that investors were "bracing for sloppy print."

"In that context, there is no debate that the details are better than feared."

Tusa rates General Electric "Overweight," with a $24 price target.

Interested in more on General Electric? See TheStreet Ratings' report card for this stock.

-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GE $30.72 -0.58%
AAPL $93.75 -1.10%
FB $117.53 0.69%
GOOG $693.00 0.29%
TSLA $240.75 -2.80%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs