Immelt resists calls to shrink GE

Chief Executive Officer Jeffrey Immelt said he will resist calls to shrink General Electric Co beyond an existing plan that includes reducing the company's consumer businesses in slowing economies.

"There are more reviews and intensity, but no real change to the strategy," Immelt said in an interview in advance of today's annual meeting, his first face-to-face meeting with investors since this month's surprise drop in profit. "The strategy remains intact."

GE shares fell the most in two decades on April 11, when Immelt reported a 12 percent decline in first-quarter earnings and said annual profit would trail his $2.42-a-share target. The profit miss, which he blamed mainly on credit-market turmoil, renewed analysts' calls for GE to sell off larger chunks of the company such as NBC Universal or consumer-finance unit GE Money.

"It goes back to: Long-term, is the strategic direction that GE's going the right one?" said Stephen Hoedt, an analyst at National City Corp in Cleveland, which owns about 17 million GE shares. The mix of finance and non-finance units "is something that a few people have been concerned about for a long time and something that we're going to have to review periodically."

Fairfield, Connecticut-based GE fell 23 cents to $32.46 on Monday in New York Stock Exchange composite trading. The shares have dropped 9 percent in 12 months and 18 percent since Immelt, 52, took over from Jack Welch in September 2001.

GE on April 11 predicted profit of $2.20 to $2.30 a share for 2008. First-quarter profit from continuing operations fell to $4.36 billion, or 44 cents a share.

Financial market turmoil cut the value of some investments and thwarted end-of-quarter commercial real estate deals, GE said, causing about 5 cents of the 7 cents drop below the estimates.

"We've sold some of the property that got pushed into April," Immelt said.

"The capital markets remain challenging. We think advising caution is a smart move."

Agencies

(China Daily 04/23/2008 page16)