GE Announces 4th Q '13 Earnings
On January 17th 2014, General Electric (GE) announced quarterly operating earnings of $5.4 billion. Earnings per share jumped 20%, compared with the same period one year ago. Revenues rose $40.4 billion higher for the quarter-a 3%rise from the same period in 2012.
While the US economy has been stabilizing, European markets have not fared as well; thus, GE's current results were surprisingly strong, given its operations across continents. Recently, GE has made a concerted effort to track changing conditions in the EU to make the most its products and services there.
A Return To Its Roots
GE was able to make strategic adjustments by doing what it does best: In an economy seeing significant signs of life in areas, such as oil and natural gas, GE industrial segments focused on these spaces to generate revenue. In particular, GE returned to nuts-and-bolts orders, such as oil pumps, jet engines, and home appliances. Profits rose 12% to $5.5 billion, with 6 of the 7 total critical segments posting positive earnings.
Specific moves like the GE -- Snecma alliance helped boost orders for new GE9X engines, and reorganizing GE Capital financial services allowed higher gains from a Swiss IPO. This pattern of using available assets to improve current revenue has been the hallmark of GE's success over the years.
GE's Attractive Dividend
GE has also re-considered the needs of its investors, increasing its dividend substantially, putting it back in alignment with historical dividends. (In 2008 and 2009, GE began acquiring a variety of unrelated business, which backfired, and which was reflected in dividend cuts these years.).
With solid earnings and new orders to kick off the New Year, GE has reassured investors about the company's future.
What Should Investors Do
We believe that the recent pullback in GE's stock price provides medium and long term investors with a good entry point to own this solid growing company that pays a great and growing dividend. We would expect that GE will continue to increase their dividend over the next few years.