GE (GE) has reported predictably mediocre Q2 earnings, as EPS of $.26 beat estimates by $.03, while revenue of $39.1 billion came in $3 billion shy of expectations, owing possibly to the dramatic dissapearance of GE Capital business.
Here’s Immelt’s relatively meaningless commentary:
“In a global economic environment that continues to remain challenging, GE delivered solid second-quarter business results,” GE Chairman and CEO Jeff Immelt said. “We are executing through the recession by aggressively controlling costs and driving working capital improvements while continuing to invest for future growth. At the same time, we are actively maintaining our backlog, focusing on higher-margin services and continuing to run our financial services business for safety and soundness. We continue to position GE to win in a reset economy.”
Breaking things down by division, things look like this:
- GE Capital shrunk 29% on the top line, with profit falling a staggering 80%.
- NBCU was down 8%. Profits down 41%.
- Technology infrastructure down 11%. Profit down 11%
Here’s more on what they see at GE Capital:
In a difficult environment, we are ahead of schedule on our plan to create a more focused financial services company. Capital Finance earned $590 million, including $149 million pre-tax, and remains on track to be profitable for the full year,” Immelt continued.
“We originated nearly $38 billion of new volume in the United States in the second quarter of 2009, an increase of 25% over the prior quarter. Since January 2008, we have provided $155 billion of new financings to companies, infrastructure projects and municipalities and extended $127 billion of credit to 50 million consumers. GE Capital has outstanding credit with more than 330,000 commercial customers and 145,000 small businesses; in 2009 we have added 16,000 new commercial customers and supported 23,000 new small businesses through our retail programs.”
For what it’s worth, GE doesn’t mark to market, so they can talk about their GE Capital business being “profitable for the full year” in the sense that cash flow exceeded costs — but they’ve obviously taken huge hits that banks would have to call losses.
The good news is that GE Cap has completed all of its 2009 financing, and a third of its 2010 financing… then again, GE is a monster user of the FDIC’s TGLP program — it’s not hard to fund your obligations when you have an explicit government guarantee on so much of your debt.
The stock is basically flat. There’s little in this report to get people jazzed in one direction or another.
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