Thursday, September 8, 2011

"Immelt and GE, 10 Years In" (GE)

At $15.52 the stock is down 1.77% on the day vs. .77% for the DJIA and .85% for the S&P 500.
It is difficult to comprehend or explain the disaster that GE stock has been for the company's retirees.
From the Wall Street Journal:
If Jeff Immelt could pick a period that captures his vision for General Electric Co., the fourth week in August might do: GE signed an electricity joint venture in China, the conglomerate's jet-engine partnership won $2.2 billion in orders from a U.S. airline and the company at a ceremony in Brazil said it was extending its Olympics sponsorship.

The part he might want to leave out: GE's stock ended that week in August down 15% from the start of the year and 61% lower than when he took over as chairman and chief executive of the industrial conglomerate 10 years ago.

And so goes Mr. Immelt's General Electric. Try as he might, the 55-year-old Dartmouth graduate, who started as CEO just four days before the September 11, 2001, terrorist attacks, still can't get much support from investors.

With a string of crises behind him and GE's portfolio of businesses now more focused around the conglomerate's industrial core, Mr. Immelt begins his second decade in the job with the challenge of proving that the company can post solid growth and that its vaunted business model still makes sense.

To do that, he has to show that the finance arm is no longer a liability and is ready to resume paying lucrative dividends to the parent and that his changes to GE's industrial portfolio and geographic footprint are reaping rewards.

"If I had to grade him, he is a solid B student, not lighting the world on fire," says Peter Klein, a senior portfolio manager at Fifth Third Asset Management in Cleveland, which holds GE shares. "The pieces now are probably at a point where they are getting polished and getting attention that profitability will improve."
For now, investors still aren't celebrating even major wins by the company. Take the Paris Air Show in June, when a GE aircraft-engine joint venture won $27 billion in orders for its new Leap-X engine, a project that cost upward of $1 billion. The stock fell for the week.

Inside the 131-year-old company, where executives are more accustomed to accolades than censure from Wall Street, the sluggish share price has created palpable frustration. Mr. Immelt counters that only two other companies, Exxon Mobil Corp. and Royal Dutch Shell, have made more money over the past decade. GE has paid out $87 billion in dividends over the period and is sitting on a company record $189 billion book of orders....MUCH MORE
Also at the Journal:

A Waiting Game at Finance Unit

GE Also-Rans Got Top Jobs Elsewhere, to Mixed Results