reaffirmed 2004 and 2005 guidance and said it expects investment returns to expand in 2006 and 2007.
The Fairfield, Conn., conglomerate made the comments at a Tuesday afternoon presentation to investors. In an accompanying press release, CEO Jeff Immelt said fourth-quarter earnings would be in line with Wall Street estimates. He also reiterated the company's commitment to return cash to shareholders.
"GE is now a much stronger company with faster-growth industrial businesses and higher-return financial services businesses," Immelt said. "We are positioned in the right demographic trends and see an accelerating organic growth rate. GE's incremental returns on capital are expanding, and we anticipate increasing cash flow and broad financial flexibility. We are well positioned to continue to invest in the company and return an increasing amount to shareowners as well."
The news comes as GE shares, long a favorite on growth-obsessed Wall Street, trade at a multiyear high. The stock has rallied some 20% this year, building on last year's double-digit gains after sharp declines in 2001 and 2002.
For the fourth quarter ending this month, GE expects to earn 48 cents to 51 cents a share. That's in line with the 50-cent Thomson First Call consensus estimate and up from the year-ago 45 cents.
The company said it expects to earn $1.57 to $1.60 a share for 2004, again in line with the $1.58 estimate, and $1.75 to $1.83 a share for 2005, which matches the $1.79 estimate. GE expects to post 15% revenue growth for the fourth quarter and 10% for 2005, which is a shade above the Wall Street target.
GE also said it expects cash flow from operating activities to growat double-digit annual rates "at least through 2007." The company said itexpects to continue to invest in its businesses, self-fund growth in financial services and "return significant value to shareowners through a substantial dividend and a share-repurchase program." Last week, GE boosted its quarterly dividend 10% and set a $15 billion stock-buyback plan.
The company said incremental returns on invested capital should exceed 25% in 2005 and further expand in 2006 and 2007.
On Tuesday, GE rose 22 cents to $37.70.