GE has sold $15 billion of new stock in an attempt to shore up its balance sheet and reduce the size of its commercial real estate portfolio by 10%, to about $90 billion. These new shares include $3 billion of preferred shares sold to Berkshire Hathaway.
GE announced that its 2008 earnings will likely fall 12% from 2007. While GE's industrial businesses have continued growing at rates of 10-15%, its financial services arm, GE Capita, which in most years accounts for about half of GE's profit, is facing difficulties on weakness with commercial real estate loans and mid-sized business loans. [1]
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The Air Force awarded a $35 billion dollar aerial refueling tanker contract to rival EADS NV and its partner Northrop Grumman. Boeing had been supplying the refuelers to the Air Force for almost 50 years and was expected to win the deal. The deal, which only would have supported 44,000 new and existing jobs at Boeing and more than 300 suppliers in the more than 40 states, is the first of three Air Force awards worth as much as $100 billion to replace its entire refuelingtanker fleet over the next 30 years. Boeing would have used Pratt & Whitney engines. Instead, EADS NV will use General Electric engines. Members of the US Congress are in an uproar about the idea of the contract being in foreign hands and are appalled at how many American jobs will be lost. The Northrop/EADS contract is expected to add just 2,000 new American jobs, compared to the 44,000 expected with Boeing in charge.
Mr. Cary, 48 years old, currently heads GE Money's Europe, Middle East and Africa operations, the unit's largest group. Mr. Cary has been with GE for 21 years. He succeeds David Nissen, who is retiring after 27 years at the company. Mr. Nissen has led the consumer-finance business, based in London, since 1993. It has annual net income of more than $4 billion -- 100 times more than when he took the post.
On August 3rd, GE announced its intended purchase of UniCredit's Polish banking unit, a deal that is expected to close by the end of the year. On the same day, EU authorities approved GE's sale of its plastics unit to Sabic, a Saudi petrochemcial company, for $11.6 billion. The proceeds will be used for GE's share buyback program, which is expected to amount to $7-$8 billion.
General Electric Co. reported $5.4 billion in 2Q profits--up 10% from last year-- and announced its exit from the declining U.S. mortgage business. Increases in profits were buoyed largely by its energy and infrastructure businesses. In addition, GE will get out of its U.S. mortgage business and sell off $3.7 billion in existing loans from its WMC mortgage business units.
General Electric announced plans to abandon its purchase of two preventive healthcare businesses from Abbott Laboratories valued around $8 billion.
GE announced that it planned to buy a controlling stake in Regency Energy, a company that owns natural gas pipelines and processing equipment.
The EU approves GE's intention to buy Smiths aerospace assets for $4.8 billion. Stocks rise from $34.76 to $36.84.
GE and Smiths Group Plc announced that they'd completed a deal to form a joint venture to create Smiths GE Detection, which will offer a variety of detection and homeland security products and services.
38 36.55 GE announces that it will acquire Abbott Labs' in-vitro and Point-of-Care Diagnostics Businesses for $8.13. Stocks fall from $38 to $36.55. They may have fallen due to the fact that Abbott's Molecular Diagnostics and Diabetes Care business (the segments that has witnessed most of the growth) is excluded from the deal.
Swiss Re announces the completion of the acquisition of GE Life. Stocks rise $2.5 to $38.
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