Tuesday, May 6, 2014

GE - The Bigger They Are, The Stronger They Grow

This article was originally published by GuruFocus on April 28, 2014
By Sarfaraz A. Khan. Research assistant: Gohar Yousuf
Earlier this month, General Electric (GE) reported its first quarter results. The company is now refocusing on its core area, the industrial business, as opposed to GE Capital. Over the last five years, the top and bottom-line growth of its industrial segment has remained in the low-single-digits. 

However, three of its biggest industrial segments have started this year with double-digit growth.
Although General Electric has witnessed a decline in revenues, that was largely due to the smaller contribution from GE Capital. Its core area, the industrial unit, continues to grow. Moreover, the company is also eyeing significant margin expansion of the industrial unit through 2016.

For the full year, General Electric has forecast organic sales growth of between 4% and 7% and profit growth of 10% of its industrial units. The company does not give earnings estimates but analysts, as per data compiled by Bloomberg, are expecting earnings of $1.70 per share, which would show a 3.4% growth from earnings of $1.64 per share in 2013.

Moreover, the company is eyeing some serious inorganic growth through acquisition of the France-based maker of trains and power plants in a massive $13 billion deal.

The company’s shares .... read full article at GuruFocus.