GE's profit falls 21% in 4th quarter

its CEO sees few signs of a recovery

January 18, 2003|By NEW YORK TIMES NEWS SERVICE

General Electric Co. reported yesterday that its profit fell 21 percent in the fourth quarter, matching the reduced forecast it made to investors in November, and the company reaffirmed its outlook for 2003.

GE's shares slipped 15 cents yesterday to close at $24.88. From its closing high of $60 in late August 2000, GE's stock has fallen 60 percent, leaving investors $360 billion poorer.

In a conference call with investors, Jeffrey R. Immelt, GE's chairman and chief executive, said he saw little evidence of a broad economic recovery. Consumer demand in the United States has slowed, with GE's appliance and lighting business flat in the fourth quarter. Europe appears slightly stronger than Asia, he said.

Immelt reiterated that the company expected its earnings per share to rise 3 percent to 13 percent this year.

With 310,000 employees worldwide and $132 billion in sales last year, GE is one of the world's largest companies.

It is a leading maker of electric turbines, jet engines, medical imaging equipment, and appliances. Its GE Capital unit is the fourth-largest financial services company in the United States, and it owns the National Broadcasting Co.

For the fourth quarter, GE posted net income of $3.1 billion, or 31 cents a diluted share, compared with net income of $3.9 billion, or 39 cents a share, earned in the last quarter of 2001.

The company attributed the earnings decline in part to the financial difficulties at its reinsurance division. In November, GE said it would take a pretax charge of $2.1 billion against its earnings to increase reserves at the reinsurance division.

Fourth-quarter revenue rose 4 percent, to $35.4 billion, from $34 billion a year earlier.

For the full year, GE reported its earnings rose 3.2 percent, to $14.1 billion, or $1.41 a diluted share, compared with $13.7 billion, or $1.37 a share, in 2001.

Annual revenue rose 4.6 percent last year, to $131.7 billion, from $125.9 billion in 2001.

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