General Electric looks overseas for growth

Shares are attractive even amid economic uncertainty.

By Jonathan Berr Mar 7, 2012 12:39PM
Image: Flourescent lightbulbs (© Ted Dayton Photography/Beateworks/Corbis)Shares of General Electric (GE) were trading up more than 2% Wednesday after the conglomerate reaffirmed its 2012 earnings guidance despite an uncertain world economy. 

The stock won't run out of gas for a while.

Wall Street analysts have an average one-year price target of $21.71 on GE, which is about 15% above the current price. The company is trading at a multiple of 15.04, below its five-year high of 16.87, according to Reuters. GE's diverse lineup of products and services and worldwide reach make it an ideal proxy for the global economy. That means as the economy eventually rebounds, GE's shares will look more attractive. Its strength is formidable.

Revenue rose 29% in China in 2011, 36% in Latin America, 14% in Sub-Saharan Africa, and  67% in Australia and New Zealand. The U.S., where revenue grew about 8% in 2011 to $75.1 billion, also did well. Like many large American companies, though, GE sees much better growth prospects overseas.

Vice chairman John Rice said Wednesday that the conglomerate expects "continued double-digit revenue growth in its global growth regions in 2012 and 2013." Latin America, Australia and New Zealand, the Middle East and Africa are expected to grow by 20% to 25%, while China, India and other Asian countries will boost revenue by 10% to 15%.

"GE has doubled revenues in 27 countries in five years, and our global revenue has expanded to more than 55% of our total industrial revenue," Rice said in a speech in Brazil. "Approximately 66% of our record $200 billion backlog comes from global markets and over half from the growth regions."

Though Rice didn't discuss the U.S., the company will also benefit from a domestic economic rebound. If these forecasts prove correct, that should quiet calls from some investors for CEO Jeff Immelt to break up GE. At least that will be the case until the next economic downturn.

Jonathan Berr does not own any GE shares.


Tags: GE
4Comments
Mar 7, 2012 2:18PM
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I guess that means we still go to war for em, but they pay even less taxes. That is, if you can pay less taxes than a tax credit they got last year.
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General Electric looks overseas for growth


Which should be instant removal from ANY subsides, earmarks, or tax exemption ...................................................................


THOSE ARE GIFTS FROM THE AMERICAN TAXPAYER (AS COMPLETELY OPPOSED BY GE'S LAST FEW YEARS OF NO TAXES PAID) SPECIFICALLY DESIGN TO AID AMERICAN BUSINESSES DO BUSINESS IN AMERICA!


BUT SINCE OBUBU AND JEFFERY IMMELT ARE EACH OTHERS FAVORITE BUTTBOYS, HIS FREEBEES WILL EXPAND!


(WAAAAAAAAAA, WAAAAAAAAA, NOT ME, I AM INVESTED IN GE AND I WANT MY (UN)FAIR ADVANTAGE AGAINST PAYING TAXES)

Mar 7, 2012 3:35PM
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What has it done for its stockholders beside F them?
Mar 7, 2012 3:00PM
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hey immelt, stop flying around the world with your buddy hussein obama! place a cot in your office and worry about how you are going to get your company's share price back to $40! enough already
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