GE to Fall Short of Earnings Estimates Due to Reinsurance Losses From Attacks
September 14, 2001
GE to Fall Short of Earnings Estimates
Due to Reinsurance Losses From Attacks
By Matt Murray
Staff Reporter of The Wall Street Journal
General Electric Co. said it would miss third-quarter earnings estimates because of reinsurance losses related to the terrorist attacks on the World Trade Center.
GE's Employers Reinsurance Corp., the largest piece of the conglomerate's financial arm, GE Capital, was a major reinsurer for property in the collapsed towers of the World Trade Center in southern Manhattan, the company said.
Analysts' mean net income estimate for the quarter had been 37 cents a diluted share, according to Thomson Financial/First Call. A year earlier, GE reported net income of $3.18 billion, or 32 cents a diluted share.
For the year, analysts had expected earnings of $1.47 a diluted share, according to First Call. In 2000, GE reported net income of $12.74 billion, or $1.27 a diluted share.
The third quarter will be the first reporting period under new GE Chairman and Chief Executive Jeffrey R. Immelt, who succeeded longtime Chairman and CEO John F. Welch Jr. a week ago.
GE, based in Fairfield, Conn., did not itself rent office space in the towers. One GE employee, an NBC technician, was in the World Trade Center at the time of the attack and was still missing as of Friday afternoon.
GE said its preliminary estimate of net losses in the reinsurance unit is approximately $600 million, or about $400 million after taxes. Those losses could reduce third-quarter net income by four cents, to 33 cents per share, up 3% from 2000, the company said. GE added that it had been on track to meet estimates before the attacks this week. |
