This is an economic recovery? Also see DRAM prices:
Message 19313547
Reuters
GE's Plastics Orders Fall by Up to 5 Pct
Wednesday September 17, 2:32 pm ET
BOSTON (Reuters) - U.S. conglomerate General Electric Co. (NYSE:GE - News) on Wednesday said global orders at its plastics business fell as much as 5 percent in August, continuing a trend exacerbated by higher raw material costs.
GE Plastics is part of GE's so-called short-cycle businesses, which account for 10 percent of the conglomerate's business. They include appliances, lighting, industrial and specialty materials.
The orders are watched closely on Wall Street because they provide a barometer of the economy.
Fairfield, Connecticut-based GE said plastics orders, measured in dollar volume, were flat to down 5 percent, compared with the year-ago period, according to information posted on the company's Web site. Profits at plastics have been hurt this year by spikes in key raw material costs such as benzene and oil.
J.P. Morgan analyst Donald MacDougall on Tuesday cut his 2003 and 2004 earnings estimates for GE because he expects lower operating profits at GE plastics.
MacDougall estimated operating profit at GE Plastics to be $440 million in 2003, down from his previous estimate of $585 million. He cited persistently high raw material costs and sees a more modest recovery for the business in 2004.
"The bigger issue from our standpoint is that excess capacity is likely to keep pressure on the profit spread at plastics, even if some relief on raw materials is forthcoming," MacDougall said in a research note. He has a "neutral" rating on GE shares.
GE Industrial orders rose between 15 percent and 20 percent in August, GE said. Appliance orders were flat to up 5 percent, while specialty materials were flat to down 5 percent.
Lighting orders fell between 10 percent and 15 percent.
GE also provided 30-day delinquency figures that indicated asset quality remains solid within its consumer financing and equipment financing units.
GE's stock was off 0.66 percent at $31.72 in afternoon trading on the New York Stock exchange. |
