SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Ask Michael Burke
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: pater tenebrarum who wrote (68821)10/9/1999 5:10:00 PM
From: Les H  Read Replies (4) of 132070
 
From Barron's re: GE earnings and pension

Abelson cites a stock analyst that has taken a closer look at blue-chip, GE, which has been reporting 13% earnings growth. He notes that 8% of that growth has been due to excess income generated from GE's pension plan. The plan has generated income in excess of obligations, and the additional income has propped up GE's reported earnings. The earnings are legit from an accounting perspective but obviously aren't giving an accurate reading on what's going on with GE's operations. What we have here, is a sort of corporate "wealth effect". Still, the disconnect is that at a P/E of 40, obviously the market is paying a premium for GE's perceived earnings growth. If one were to ratchet
that growth down 5%, and use the Dow stocks as a benchmark, then GE is trading at least 50% above a fair (relative) value. That may be true, but Abelson forgets to note that the other Dow companies are using similar tricks in reporting their earnings as well.

>>>Posted link to rest of Barron's summary on MDA thread
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News