Hot Features
Premium
Level up your trading with our powerful tools and real-time insights all in one place.
“GE (NYSE:GE) ended the year with strong fourth-quarter industrial earnings and margin growth. the environment remains volatile, but we continue to see infrastructure growth opportunities. We are pleased with our execution in 2014, meeting our commitment to grow industrial segment profits 10%, industrial segment organic growth of 7%, increasing operating margins 50 basis points, decreasing costs by $1.2 billion, reducing the size of GE Capital and returning $11 billion to share owners.” Those are comments from Jeffrey Immelt, Chairman and CEO of General Electric, accompanying the presentation of GE’s Q4 results on 23 January. GE’s share price was up 0.82% to 24.48 in trading on Friday.
During this next week, more than 140 other stocks listed on the New York Exchange will follow suit with their Q4 reports. It is going to be a busy week as investors continue to respond to the European Central Bank’s decision to embark on a massive quantitative easing, react to the election results in Greece and wait for the U.S Federal Reserve to present its monthly report.
A lot has happened in the month that has passed since the Fed’s last report, and what has happened could potentially affect how and where investors invest. The decline in the value of the euro vs. the dollar (it hit an 11-year low on Friday) has American investors moving their funds to the now cheaper European equities. It looks as though the leftist Syriza party has won the elections in Greece. Their platform is to stop austerity measures, in large part, by negotiating for a write-off of their debt.
GE’s concern is much like an investor’s concerns: Remaining stable in an increasingly volatile environment. GE is accomplishing that goal by transforming its company. Wise investors do it by transforming their portfolios. GE is transforming by “investing to lead in the new technologies that will drive efficiency for the company and our customers.” In other words, this is not your grandfather’s General Electric. Neither should your portfolio look like your grandfathers.
Back to GE
The transformation of GE is an interesting story that is still unfolding as it shifts its focus to concentrate on the biggest potentials for growth.
Already in the first quarter the U.S. Department of Defense has awarded the company an indefinite delivery – indefinite quantity contract in the amount of $325 million to continue work on an “order of magnitude” advance in turbo-propulsion systems. The contract is part of the Pentagon’s larger Versatile Affordable Advance Turbine Engines (VAATE) initiative. Although GE will have to bid on supplying engines under that program, but, with its foot already in the door, you can be certain that they do not intend to lose a contract that is projected to be worth a minimum of $4.5 billion, especially when the material issue is replacing all of the current (General Electric) engines in Blackhawk and Apache helicopters used by the U.S. military.
GE is positioned to win, not only the aforementioned contract, but the competitive battle for technology and infrastructure. The company worked hard to gain its leadership position. It is going to work just as hard to maintain it.
