Through TheFLY's Eyes: General Electric
from Joseph Lazzaro of Theflyonthewall.com
GE's Q4 Earnings More Than Double
General Electric (NYSE:GE) said Friday Q4 earnings rose in every division but GE Industrial, which was weighed-down by sub-par plastics performance.
GE said Q4 EPS totaled 64 cents per share, up from 30 cents a year ago, while Q4 revenue totaled $44.6B, up 11% from a year ago. For 2006 GE earned $2 per share on revenue of $163.7B.
Nevertheless, GE's shares sold-off on the news and were down -86c to $37.16 in early afternoon trading. The overall consensus among analysts was that the poor plastics performance underscored the need for GE to divest the unit, which the company has been attempting to do. GE has confirmed that it plans to auction its plastics unit for about $10B.
The compelling question is whether GE's pull-back represents a buying opportunity, and the Wall Street consensus appears to be: yes. True, plastics will remain a drag until divested, but otherwise GE is levered to the global economy in the best sorts of ways [aerospace, overall industrial], with almost of the macroeconomic and sector-specific trends pointing in the positive direction.
Hence, counter to an adage, the future for GE probably is not in plastics, but in overall global growth.