Video: Upbeat outlook

updated 1/21/2005 2:05:42 PM ET 2005-01-21T19:05:42

General Electric Co., the industrial, financial and media conglomerate that ranks as the nation’s biggest company based on its value on the stock market, reported Friday its fourth-quarter profit rose 18 percent, citing the impact of acquisitions, strong industrial sales and an excellent global economy.

(MSNBC is a joint venture of Microsoft and NBC, which is a GE company.)

The Fairfield-based owner of the NBC network earned $5.37 billion, or 51 cents per share, in the October-December period, up from $4.56 billion, or 45 cents a share, a year ago.

The results beat the consensus estimate of 50 cents per share of analysts surveyed by Thomson First Call.

Revenue in the fourth quarter was $43.7 billion, up 18 percent from $37 billion in the same period a year ago.

“GE had a tremendous fourth quarter and an excellent 2004, as we completed our strategic repositioning and returned to double-digit earnings growth in the quarter,” said Jeff Immelt, GE’s chief executive. “We are benefiting from strong execution of our growth initiatives and an excellent global economy.”

Immelt predicted GE would achieve earnings growth of 10 percent to 15 percent this year.

“The breadth and the depth of the momentum we see is very positive,” Immelt said in a conference call with analysts. “We think we’re in a period of expanding returns and have lots of cash flexibility.”

Industrial sales grew 19 percent in the fourth quarter, while total orders increased 15 percent over last year, Immelt said.

For the year, GE reported earnings of $16.6 billion, or $1.59 per share, on revenue of $152.4 billion. That compared with earnings of $15 billion, or $1.49 per share, on revenue of $134.1 billion a year ago.

GE often produced double digit profit growth during the 1990s, but earnings have been sluggish the past three years as major businesses such as gas turbines for power plants have slowed.

GE embarked on a growth strategy with acquisitions that played a key role in boosting sales in the latest quarter. General Electric Co., a diversified technology, media and financial services company, said Friday that fourth-quarter earnings rose 18 percent to beat Wall Street expectations, as nine of its 11 businesses contributed double-digit earnings growth.

Net income increased to $5.38 billion, or 51 cents per share, from $4.56 billion, or 45 cents per share, a year ago.

Revenue was up 18 percent to $43.71 billion from $36.96 billion last year. Industrial sales increased 19 percent to $24.6 billion, reflecting the impact of acquisitions, solid core growth and lower sales at GE Energy. Financial services revenue rose 16 percent over last year to $19.2 billion.

Analysts surveyed by Thomson First Call were looking for GE to post earnings of 50 cents per share on sales of $42.09 billion.

Earnings in the company's insurance segments declined as a results of increased loss reserves for policies written in prior years, and the divestiture of several businesses.

For the full year, GE earned $16.59 billion, or $1.59 per share, up 11 percent from $15 billion, or $1.49 per share, last year. Revenue grew 14 percent to $152.36 billion from $134.19 billion, with industrial sales up 17 percent to $82.2 billion. Financial services revenue increased 10 percent to $70.8 billion, including the effects of exiting certain insurance businesses.

Analysts were looking for the company to report fiscal 2004 profit of $1.58 per share on sales of $150.27 billion.

Chairman and CEO Jeff Immelt said, "We're going into 2005 with excellent momentum. We are very confident about achieving 10 percent to 15 percent earnings growth with strong cash flow growth and sustaining this growth into 2006 as well."

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