GE, shuffling the deck?
Do large, well imaged companies, reshuffle the deck when restatments would be necessary anyway? Would information become evident that enlightened us to GE's "double digit" returns? Answer; go look at the annual reports! GE Exec's should be our ambassadors to China, they are the political genius of image. I remember in the end "go-go" 90's when they were one of the only large old companies to sustain a "double digit" growth- I think the reports pointed to the fact that floating of debentures/bonds were the likely source of rising dividends and "growth" ????
Date: 6/28/2005 2:57:32 PM ( 16 y ) ... viewed 1139 times
GE realigns businesses, affirms forecast
Thu Jun 23, 2005 11:08 AM ET
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By Daisuke Wakabayashi
BOSTON (Reuters) - General Electric Co. (GE.N: Quote, Profile, Research) on Thursday said it is streamlining its businesses to six operating segments from 11 in an effort to cut costs, and it affirmed its second-quarter and full-year profit forecast.
GE, whose businesses range from health care to aerospace and television, also named three new vice chairmen in its first major change in senior leadership since Chief Executive Jeff Immelt took the top post in September 2001.
"These changes will accelerate GE's growth in key industries," Immelt said. "In addition, we believe we can reduce $200-300 million of cost in savings and structural redundancies."
The company's units will be aligned into GE Infrastructure, GE Industrial, GE Commercial Financial Services, NBC Universal, GE Healthcare and GE Consumer Finance.
GE promoted three senior executives to vice chairman, providing Immelt with a nucleus of younger advisors who have steered the conglomerate through some tough downturns in recent years and played a key role in its transition into a more technology-driven company.
Dave Calhoun, 48, will lead its infrastructure business; Michael Neal, 52, will head commercial financial services; and John Rice, 48, will lead its industrial unit, GE said.
Meanwhile, Vice Chairmen Dennis Dammerman and Bill Castell, who are both members of GE's board of directors, are set to depart in coming months. The three new vice chairmen will not join GE's board at this time, the company said.
Dammerman, who oversees GE's financial businesses and was vice chairman under former CEO Jack Welch, will step down at the end of the year, while Castell, the head of GE's health care business, plans to retire in 2006.
Steve Roukis, director of research at Matrix Asset Advisors, said all three new vice chairmen are aggressive and dynamic leaders with a proven track record.
"They've been there a long time, and it's just very strong natural evolution that's making it easier to run the company and easier to grow," said Roukis, whose company holds more than 1 million shares of GE.
But Roukis said it was also important that GE backed its earnings forecast.
This is the shaky time of the year, going into the July quarter," he said.
GE said the company is on track to hit its earnings targets of 43 cents to 45 cents per share for the second quarter and $1.78 to $1.83 for 2005.
Analysts on average expect 44 cents per share for the quarter and $1.81 for the year, according to Reuters Estimates.
"We see continued double-digit growth into 2006 and beyond," Immelt said.
As part of the realignment, GE lumped its appliances and lighting business into the industrial segment along with its materials and security, sensors and automation units. Equipment services will also fit under that business.
GE Infrastructure will become one of the company's largest businesses, encompassing energy, jet engine, rail and water. Calhoun, who was rumored to be on the short list to become Boeing Co.'s (BA.N: Quote, Profile, Research) CEO, will run the division.
In its health care unit, GE said Joe Hogan will take over as president and CEO in July, while Castell remains chairman of the business.
The operating structures of NBC Universal, led by GE Vice Chairman Bob Wright, and Consumer Finance, led by Dave Nissen, are unchanged.
Shares of GE fell 24 cents to $35.26 in morning New York Stock Exchange trade. The stock is down more than 2 percent year to date, compared with the 1 percent rise among its peers on the Dow Jones industrial average. (Additional reporting by Edward Tobin)
© Reuters 2005. All Rights Reserved.
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