GE provides outlook for 2008 and 2009
18 Dec 2008
GE yesterday reconfirmed its 2nd December 2008, fourth quarter EPS outlook of $.50-.52, excluding the previously announced $1.0-1.4 billion of charges ($.36-.42 including charges).
It said said it expects full-year 2008 EPS of $1.78-1.84 from $185 billion in revenue. GE chairman and CEO Jeff Immelt provided this operational update at the company's annual outlook meeting in New York.
''While 2008 has been a challenging year for the global economy and for many of our businesses, we still expect to earn over $18 billion and outperform the S&P 500 Industrials and Financials sectors,'' Immelt said. ''We expect the difficult market conditions to continue in 2009.
''We have taken a number of decisive actions to respond to the tough environment and position the company for 2009 and beyond,'' Immelt said. ''Our industrial businesses have superior technology, multiple revenue streams, geographic diversity and substantial backlogs. In addition, we are aggressively reducing costs and improving cash generation. In 2009, we have set forth a framework of industrial businesses' earnings growth of 0-5 per cent . And we will continue to run our C&I business as part of the portfolio,'' Immelt said.
''Our financial services businesses, while slowed by the current financial crisis, are strong, global, middle market franchises with a conservative originate-to-hold model backed by senior secured collateral. We expect financial services to earn approximately $5 billion in 2009.
''We are focused on our company-wide initiatives of growing organic revenue, reducing costs and expanding margins. We expect our major equipment and services backlog to remain strong in 2009, and we will expand our industrial margins, which already compare favorably to our competitors,'' Immelt said. ''We are committed to investing in innovation and technology even in these challenging times. We will maintain our $1 billion investment in executive development and training, and we have allocated $6 billion for technology spend in 2009. Because of our long-term investment in clean energy and healthcare, GE is well positioned to support governments around the world as they invest in infrastructure. This morning we received an approximately $3 billion order for gas turbines in Iraq to support the reconstruction of their power generating capability.''
The GE board of directors also declared a quarterly dividend of $0.31 per outstanding share of its common stock, for a full-year total dividend of $1.24 in 2009, consistent with the 2008 dividend payment. GE has paid a dividend every year since 1899. The fourth quarter dividend is payable 26 January 2009, to shareowners of record at the close of business on 29 December 2008. The ex-dividend date is December 24, 2008.
GE also announced that it will no longer provide specific quarterly EPS guidance. Instead, the Company will provide a full-year operating framework with detail in the industrial and financial businesses. The Company remains committed to high levels of disclosure and transparency, and will continue to report all of its quarterly segment details.
''We have multiple drivers of growth in a downturn, including services, infrastructure and strong margins,'' Immelt said. ''We are committed to our strategy of growing globally, driving innovation, developing partnerships and using our scale. We are confident that as the economy recovers, GE will return to its historical earnings growth rate.''
2008 and 2009 highlights of continuing operations:
- Reconfirms December 2, 2008 earnings per share (EPS) outlook of $.50-.52 excluding charges ($.36-.42, including charges), and full-year 2008 EPS of $1.78-1.84
- Plans for 0-5 per cent Industrial earnings growth and approximately $5 billion of financial services earnings in 2009
- Maintains annual dividend at $1.24 in 2009
- Eliminates quarterly EPS guidance but will provide full year operating framework
- Will continue to run Consumer & Industrial (C&I) as part of the portfolio
