This Day On The Street
Continue to site
ADVERTISEMENT
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

GE Hopes Transformation Brings Energy Back to Its Shares

NEW YORK (TheStreet) --General Electric (GE - Get Report) keeps surprising investors in ways it hopes will build excitement and loyalty. Most recently it won the energy business of French engineering conglomerate Alstom, a deal that GE snatched from the jaws of its German competitor Siemens (SI).

But CEO Jeff Immelt is looking beyond that. He wants to make good on his plan to transform GE from a finance-focused labyrinth into a heavyweight of the industrial equipment universe. The Alstom transaction is just one component of that transformation.

By spinning off its credit card business, Synchrony Financial, via an initial public offering later this year GE lowers its dependence on profits from its finance division to a target of less than 25% by the beginning of 2016 from 45% in 2013.

>>Why Apple Has Become a 'Bellwether' for 2014

>>For Yahoo!, Earnings Means More of the Same

In addition, the company built a research center in San Ramon, Calif., just down the road from Silicon Valley. There it employs nearly 1,000 bright minds working on what GE has called its "industrial Internet," a host of software operating systems that connects physical machinery to a digital network.

With 5% of the company's revenue devoted to research and development, the new research facility is working furiously to fulfill GE's self-proclaimed ambition to become one of the world's 10 largest software firms. This is quite the departure from the old GE, which prided itself on being a hardware industrial provider only.

GE's Immelt recently said that rather than acquire its way into the software business it would build that business organically. So the company hired Bill Ruh from Cisco Systems (CSCO) and set off on the task of getting GE's software operations going strong.

The three-pronged areas of software development include: how to optimize the efficient performance of machines like GE's jet engines, predicting when a machine will need maintenance or repairs, and coordinating the performance of a complex system like a railway or an alternative energy grid.

1 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
SYM TRADE IT LAST %CHG
GE $27.72 0.00%
AAPL $131.39 0.00%
FB $80.48 0.00%
GOOG $542.51 0.00%
TSLA $245.62 0.00%

Markets

DOW 18,285.74 +0.34 0.00%
S&P 500 2,130.82 +4.97 0.23%
NASDAQ 5,090.7940 +19.0510 0.38%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs