Mike, you gotta love these comments:
GE posts record earnings and revenues
..
Twenty-two of the company's 28 businesses saw
earnings rise at double-digit rates, led by specialized
financing and specialty insurance activities.
Analysts said the company's performance was particularly
impressive in the face of Asia's economic woes. Asia
represents about 9 percent of GE's revenues.
"There have been so many companies reporting
disappointing earnings, or softness in Asia hurting their
prices, but GE continues to chug right along and
overcome any softness they may have," said William
Fiala, an analyst at Edward Jones.
The company also said strong global growth and
expansion positioned the company for a record
performance for the full year. Last year, the company had
revenues of $90.8 billion, up from $79.2 billion in 1996.
GE's three-year-old transition toward services, as
opposed to traditional manufacturing, will continue to pay
off, analysts said.
"Services don't suffer price deterioration," said Nick
Heymann, analyst at Prudential Securities. "It's a
bulletproof vest for their business plan.
"The emphasis on services and on (the quality initiative)
Six Sigma -- which is doing things right the first time -- is
what's driving the margins," Heymann said.
.
.
"Net-net, these guys' post-industrial business model is
working," Heymann said. "Today, what's tripping up so
many manufacturing companies is the fact that they're
finding that as they make industrial products, there's a
tremendous amount of surplus capacity in Asia, and that
pricing pressures on the selling side are just intense.
"There is a stealth undertow that is starting to hurt
margins, but in GE's case that isn't even close to
happening," Heymann said.
"Some 70 percent of the company's business is in
services, and as a result, they have a much higher return
on capital, much better cash flow."
End Quote.
Is this guy trying to tell us that manufacturing economy just doesn't make sense? I am pretty sure he would rather operate a few pyramid schemes and call them the underpinnings of a strong economy. What a jerk. I wonder where he got his degree from.
-MMV |
