The chief executive of General Electric Co. was more positive about its troubled finance business in an appearance before investor analysts, but growth opportunities elsewhere at the Fairfield-based conglomerate are less visible, an analyst said today.
“There was a distinctly more positive tone around GE Capital with stabilization in business trends and strong margins on new commercial finance business,” analyst Nigel Coe of Deutsche Bank North America said in a note to investors.
CEO Jeff Immelt spoke Tuesday to analysts at the Electrical Products Group conference in Longboat Key, Fla.
GE’s business include NBC Universal, operator of WVIT Channel 30 in West Hartford.
Coe said GE sees its capital finance business shrinking, though the outlook is still for “substantial pretax losses” next year that could require an additional $6 billion to $7 billion in capital funding.
However, management believes funding can be done internally and said the dividend is safe, he said.
GE executives have said they will not have to raise new capital to prop up GE Capital, which finances everything from credit cards to commercial real estate. The unit has fueled a steep slide in GE’s share price as credit and property markets seized up over the last year.
In late February, GE slashed its dividend by 68 percent, a move expected to save $9 billion in cash. It was its first dividend cut since 1938.
GE soon after lost its coveted top ‘AAA’ credit rating from Standard & Poor’s.
The tone of Immelt’s presentation “was certainly positive,” Coe said. However, growth opportunities such as gains in the health care service market, new locomotives and other businesses based on new technologies are “clearly less visible” than in other areas, he said. (AP)
