GE is about to begin working the Wall St. crowd. The message: we have quality earnings. Don’t worry. No hidden earnings or balance sheet problems here. “Jeff and I can do a better job of explaining our performance quarter by quarter,” Keith Sherin, chief financial officer told the Financial Times.
But, GE still may be looking past the writing on the wall. Investors are not worried about the quality of GE’s earnings. They are worried about the lack of earnings progress at some of GE’s operating units. Revenue at the company’s industrial unit fell 5% to $8.04 billion in Q4 06. Segment profit at the unit fell 12% during the period.
GE’s NBC Universal unit has still not shown that it can deliver anything beyond mediocre results. In the fourth quarter of last year, NBC Universal revenue rose 1%.
GE’s management has it all wrong. No one wants to hear about "quality of earnings". Being in businesses that are growing is much more important.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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