Hi Paul - In your post of 8/10/2007 (http://siliconinvestor.com/readmsg.aspx?msgid=23783627) you alerted me of Schwab's equity rating of Grade "D" on GE which is based on several valuation criteria. It's interesting that GE is down more than 16% from your post.
GE generally hits their earnings forecasts +/- 1% from their actual. I believe their most current report was off by more than 10%, one of the biggest misses in recent history.
From a Bloomberg article today:
bloomberg.com
On a conference call today, analysts demanded that Immelt explain why he told retail investors on a March 13 Webcast that Fairfield, Connecticut-based GE would likely meet its annual forecast of at least $2.42 a share.
``Two days after the Webcast, the Bear Stearns situation took place,' Immelt said. ``The last two weeks in March were a different world in financial services.'
The market turmoil also prevented GE from selling some finance assets, Immelt said. GE put its U.S. credit card business and Japanese consumer finance units up for sale last year. The health-care unit also trailed expectations....
"We had planned for a difficult environment," he said. "We had planned for an environment that was going to be challenging, but what I would say is kind of late in the quarter, particularly after the Bear Stearns event, we experienced an extraordinary disruption in our ability to complete asset sales and incurred marks of impairments and this was something that we clearly didn't see until the end of the quarter."
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My take away is even with one of the best management teams, GE was caught in the Bear Sterns downdraft. I just wonder if many of those "financial" assets Immelt said incurred "marks of impairments" were a few of those balance sheet valuations that Schwab late last year had categorized as Grade "D".
EKS |
