- Investors didn't seem too thrilled with GE's $550M purchase yesterday of Cameron's (CAM) reciprocating compression division, sending GE shares more than 1% lower today.
- For CAM, Sterne Agee views the asset sale (and likely additional sales) as positive but believes execution of its core businesses will be the key to success in 2014; while asset sales could prompt some modest downside to its 2014-15 EPS estimates of $3.90 and $5.00, the firm sees CAM's aggressive approach to buying back stock in Q4 indicating confidence in its operations and execution.
- Citigroup removes GE from its Focus List, not because of the purchase but due to its earnings: GE unexpectedly fell 10 bps short of its 2013 target of 70 bps of operating margin growth, normally not a big deal "but since GE does not provide EPS guidance, this target had become a disproportionally key 2013 milestone in GE’s road to a transformational mix of 70/30 industrial/capital."
Double-dip: GE buys Cameron unit, Citi removes from Focus List
Jan 21 2014, 18:35 ET