CEO Jeffrey Immelt, can show their confidence in the outlook for General Electric Co. 's growth next week to outline the investment plans and the second dividend increase in six months.
GE, which accumulated cash of approximately $ 78,000,000,000 at September 30, released its earnings for the second consecutive win in the last quarter and showed a simultaneous increase in orders for service and equipment for the first time in two years. finance unit, GE Capital, expected annual earnings of $ 3 billion this week.
The "comfort factor with investors has increased significantly" from GE Capital, said Jeffrey Sprague, founder of Vertical Research Partners Inc., which expects an increase in the quarterly dividend of 2 cents a share this month. "For people moving to the next level to be strong growth in industrial profits."
A pulse of current payment of 12 cents mark a return to the pattern of GE's announcement of the annual increases in the fourth quarter, the company made from 1983 to 2007. In February 2009, GE cut its quarterly dividend to 10 cents from 31 cents, about 68 percent, while the global financial crisis deepens. The Board raised the dividend by 20 percent in July and resumed share repurchases.
1992 dividend increases
GE projected to have $ 20 billion in discretionary cash at year end after the sale of assets. Immelt may indicate how some of that money will be spent when he talks about the prospects of next year at an annual meeting with investors on 14 December.
Robert Cornell of Barclays Plc. and Terry Darling of Goldman, Sachs & Co. are also among analysts expecting a dividend increase, with estimates of 8 percent to 30 percent, according to the notes to investors this month. Cornell recommend buying GE Darling, while Sprague rates "hold."
A dividend increase of 8 percent annual pay increase GE's 52 cents from 48 cents, while a 30 percent increase would mean an annual dividend of about 62 cents. The last time GE has increased its dividend twice in one year was in 1992.
A projection based on research and analysis indicates GE probably will not increase the dividend this month, increasing to 14 cents in September instead.
A GE spokeswoman, Anne Eisele, declined to comment on potential ads at the meeting.
Five-year streak
The Fairfield, Connecticut-based company no longer provides a forecast per share, instead of giving investors a framework for the calculation of your account.
GE can earn $ 1.12 per share in 2010 and $ 1.27 per share in 2011, the average estimate of analysts surveyed by us.
In addition to the dividend increase possible, GE can devote some of their cash reserves "bolt-on" acquisitions that fit with existing businesses, Dresser Inc., GE Energy unit agreed to buy for about $ 3 billion in October.
"There are good opportunities out there for acquisitions, Immelt told investors on a conference call in October. "If we see good opportunities, we will increase the dividend and buy back more."
Immelt, 54, is about to break a streak of five years in which GE shares have pulled 500 of Standard & Poor's.
GE rose 13 percent this year through yesterday, while the S & P 500 gained 11 percent. The shares rose 12 cents to $ 17.25 at 10:28 am today in the market for New York Stock Exchange.
New Products
Immelt has staked GE's industrial growth in the development and manufacture of products promising technology of gearless wind turbines for testing cancer treatment. The company will invest U.S. $ 20 billion in technology development in the two years until 2012 and said in May that would increase research spending by 18 percent this year.
team orders rose 9 percent in the third quarter while the portfolio stood at 172 billion U.S. dollars as Immelt declined the finance unit of the company and focused on the expansion of core industrial divisions. The company is the world's largest maker of power turbines, aircraft engines, medical imaging equipment and locomotives. Other units include appliances, lighting and factory automation software.
In 2012, Immelt plans to reduce GE Capital's assets to $ 440 billion to end the net investment, a measure used by analysts to measure the size of the financial division, about 489 billion U.S. dollars in the third quarter.
"Prudent" Plan
The finance unit still plans to resume payment of dividends internally to the parent company of the year to its traditional rate of 45 percent of profit, Michael Neal, executive director of the unit, said this week at a media presentation for investors Internet. This dividend was suspended amid the financial crisis.
Neal, who called the plan "prudent" in the midst of changing U.S. regulations and global levels, did not rule out a dividend payment at one time to the parent company in the meantime.
Neal projected revenue growth of unit further next year and in 2012. Last year, profit fell 80 percent to $ 1.7 billion.
GE consider opening talks on early repurchase of $ 3 billion in preferred stock acquired by Berkshire Hathaway Inc. Warren Buffett during the crisis, Buffett agrees, after selling the majority stake in NBC GE Universal closes, CFO Keith Sherin said in October. Saving the company an annual payment of 10 per cent special dividend, or about $ 300 million.
Ratings
GE cut its pay shareholders $ 1.24 a year in February 2009, saying the move would save about $ 9 billion a year, the global recession and credit benefit unit draining finances.
In March of that year, Standard & Poor's cut the company's credit rating to AA + from AAA, the highest available. Moody's Investors Service followed the same month a reduction of Aa2 to Aaa, its highest level.
"They have to do something for its shareholders and is sure to make every effort to maintain its AA-plus rating," said Joel Levington, who follows GE as part of its monitoring work in corporate credit in Brookfield Investment Management New York.
A dividend increase would "find a solution for everyone," he said.
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