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GE Projects Double-Digit Profit Growth for 2012

Tuesday, 13 Dec 2011 04:43 PM

General Electric Co. said on Tuesday it expects earnings to grow by double-digits next year despite a volatile economic environment and challenging European markets.

The maker of jet engines, locomotives and industrial machinery expects 5 percent sales increase next year but a 5 percent to 10 percent sales growth in its industrial business, driven by international demand and still-robust emerging markets in the Middle East and China, Chief Executive Jeff Immelt told the company's annual outlook meeting in New York, adding the company was well-positioned for a volatile environment.

"2011 is really on track, we'll have a good finish to the year, we see strong double-digit growth next year," Immelt told investors at a meeting in New York held in the studio where the long-running "Saturday Night Live" television show is shot.

"We think this is a good performance in a volatile time. I think we have some hedges built in the plan if the macro environment gets tougher, from an industrial standpoint. But I would say a more balanced plan than we have had since the crisis started." Immelt said.

European markets are going to be a headwind to growth next year but the company said it is confident it can manage and has low exposure to sovereign debt. GE plans to restructure its European operations, reducing its manufacturing footprint.
Immelt said he was positioning the largest U.S. conglomerate for a volatile environment in 2012 but saw continued strength in the Middle East and China.
"We feel good about the world. It's not without problems but we feel pretty good," Immelt told the annual meeting. "The world's risky and volatile but there's a lot of opportunity out there."

GE said it expected to gain market share next year in the market for narrow-body jet engines and wind turbines.

Immelt said the company is prepared to continue to cut costs to hit its profit growth targets next year, even if the global economy worsens: "There would be macroeconomic scenarios that are worse than our core plan that still end up with double-digit earnings."

Analysts, on average, expect GE to earn $1.56 a share in 2012 on sales of $150.8 billion, up from $1.37 per share and $149.7 billion estimated for 2011.

GE, which last week raised its dividend for the fourth time since July 2010, said it aimed to increase the dividend in line with earnings and said its top two priorities for cash are the payout and reducing its share float. The company, which has spent billions to broaden its energy portfolio, said it was likely to add smaller bolt-on acquisitions in the $1 billion to $3 billion range.

GE shares closed down 4 cents at $16.42. The broader market also closed lower on Tuesday.

"Our earnings are going to look pretty decent by the time the dust settles in 2012," Immelt said. "Coming through the crisis, 2012 is going to be a good year for us."

The company is one of several multinational industrial companies laying out their 2012 forecasts this week.

On Monday, 3M Co. forecast 2012 earnings and revenue toward the high end of Wall Street expectations, citing "slow but positive growth" in the United States and an expected recovery in the global electronics market in the second half of next year.

3M forecast 2012 revenue growth of 2 percent to 6 percent due to continued gains in most of its businesses -- including the two largest, transportation and health care -- and strengthening conditions in emerging markets.

United Technologies Corp., Honeywell International Inc. and Danaher Corp. are set to lay out their expectations in coming days.

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General Electric Co. said on Tuesday it expects earnings to grow by double-digits next year despite a volatile economic environment and challenging European markets. The maker of jet engines, locomotives and industrial machinery expects 5 percent sales increase next year...
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2011-43-13
Tuesday, 13 Dec 2011 04:43 PM
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