Sunday, January 20th, 2008
Foreign Growth Boosts GE’s 2007 Earnings
By Mike Caggeso
Associate Editor
For the first time, overseas growth and revenue compromised more than half of General Electric Co. (GE) fourth-quarter earnings.
The company reported earnings of $6.8 billion, up 15% from earnings the previous year, and earnings per share (EPS) growth of 68 cents, up 17%. For fiscal 2007, earnings were $22.5 billion, up 16%, and EPS was $2.20, up 18%.
The surge of international growth was fueled by infrastructure growth, which accounted for 26% of profit growth. Total orders were up 18% to $27 billion.
The company forecasts full-year 2008 continuing EPS of at least $2.42.
GE Chairman and Chief Jeff Immelt said in a statement that the company is built to outperform in an otherwise stagnate U.S. market.
"Our record performance in such a tough environment validates the strength of our strategy and the talent of our team," Immelt said.
Breaking Ground
While many companies [and their investors] flocked to China and India to tap their growing middle classes, GE was in other countries… creating them.
Perhaps the best examples of GE’s performance this year are a pair of billion-dollar deals in countries where few other U.S. businesses venture - Turkmenistan and Algeria.
In the former - a normally very politically and socially isolated country - GE inked a deal to build two power plants and help the desert nation [and Central Asia's leading source of natural gas] develop solar-energy production. Financial terms weren’t disclosed.
In Algeria, GE won a $2.15 billion contract to build a 1,200-megawatt combined-cycle plant with Spanish power company Iberdrola S.A. over the next 46 months. In June, Alstom and GE signed deals totaling $767 million to build power plants in Algeria.
"Every place we went there’s a need for power, there’s a need for planes, there’s lots of capital being invested, and there’s just no signs this global infrastructure boom is slowing at all," Immelt told investors on a conference call.
News and Related Story Links:
- General Electric:
GE Reports Record Fourth-Quarter and Full-Year Results for 2007; 4Q EPS up 17%; 18% for the Year
- Money Morning:
Algeria Awards $4.1 Billion Worth of Power Plant Contracts; General Electric Part of $2.15 Billion Deal
- Money Morning:
GE to Build Two Power Plants in Turkmenistan
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