Tuesday, General Electric’s (NYSE:GE) CEO Jeff Immelt, gave his annual outlook to shareholders and analysts. The meeting took place on the “Saturday Night Live” stage in Rockefeller Center. Did the meeting deliver more smiles than past meetings when GE was in the midst of the credit crisis?
Jeff Immelt wasted no time addressing the different circumstances of this annual meeting compared to past meetings. He said, ” It’s a lot more fun to be here today than it was two years ago.” If you recall, GE saw its share price crash from about $40 down to $10 during the great credit crunch. Although the stock has rebounded to about $17 per share, Immelt attempted to calm any doubts about the company’s financial arm, GE Capital. Immelt said, ” We are going to get good earnings growth from GE Capital.” Immelt even took it a step further and claimed GE will provide good earnings through 2012.
Shareholders and analysts should continue to pay close attention to a trio of factors for the upcoming years. These factors include dividend increases, share buybacks, and acquisitions. GE has shown commitment to these factors by increasing its dividend two times this year. Furthermore, GE expects to retire Warren Buffett’s preferred stock in the company no later than October. Immelt has made it clear that large acquisitions are probably not on the table, but the company has agreed to make smaller acquisitions, such as the $1.3 billion deal for Wellstream, an energy equipment company. With expectations to end the year with $20 billion in cash, investors can expect more acquisitions to come for 2011.
Overall, the meeting set a positive outlook for GE in the upcoming years. GE has already stablized earnings growth, as the past two quarters have shown. Dividends and share price have also rebounded for 2010. Although GE is the world’s second largest company, investors need to keep in mind that even the big guys may need help in times of crisis. Earlier this month, it was learned that in the credit freeze of 2008, GE had to rely on the Fed to purchase its commerical paper 12 times, totaling $16 billion.
Disclosure: No positions.