General Electric Co., which last year cut its shareholder dividend for the first time since the Great Depression, may resume increases in 2011 and repurchase stock for the first time since 2008 amid a “snapback” at the finance unit, Chief Financial Officer Keith Sherin said.BigCharts:
“We’d like to grow the dividend in 2011,” Sherin told investors today at a conference in Boston organized by Goldman Sachs Group Inc. The outlook for the remainder of 2010 has become clearer since the company discussed fourth-quarter results in January, he said. “We’ve got better visibility around financial services. If you think about 2011, we believe we’re going to have GE earnings growth.”
GE Chief Executive Officer Jeffrey Immelt has refocused the Fairfield, Connecticut-based company on its role as the world’s biggest provider of jet engines, medical-imaging equipment and power turbines and related services, targeting emerging-market and service-contract growth as well as research and development.
Last year, the company invested 7 percent more in research and plans to keep developing new products while shedding divisions not central to its main business lines, such as a majority stake in the NBC Universal media unit, Sherin said.
He repeated a forecast for about $25 billion in cash at the end of this year and said the company may also use the proceeds for strategic acquisitions as the GE Capital division stays at between 30 percent or 40 percent of total profit.
“On the industrial side, we’ve made a clear call on capital allocation to invest back into infrastructure,” Sherin said. “We feel great about the growth.”
GE cut its annual dividend to 40 cents from $1.24 in February 2009 as the global recession and credit crunch drained profit at its finance unit. Earnings from continuing operations fell 38 percent to $11.2 billion in 2009, and per-share profit of $1.01 is expected to remain about the same in 2010, the company said....MORE