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GE investors get the call
Conglomerate set to disclose more information in earnings release and conference call.
April 10, 2002: 4:53 PM EDT
By Chris Isidore, CNN/Money Staff Writer

NEW YORK (CNN/Money) - General Electric Co.'s first-quarter earnings release Thursday is generating far more excitement and interest than normal, not because of the expected results -- it's likely to again be at the consensus forecast -- but because of the information that will be made available on the company with the nation's largest market value.

For the first time, the Fairfield, Conn.-based conglomerate will hold a conference call for investors following the earnings release. Company executives said they will also provide more details in the earnings release than in the past about performance of specific units within the company.

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GE's businesses include everything from financial services to broadcaster NBC, and from consumer products such as appliances and light bulbs to industrial products such as jet engines, power turbines and medical equipment.

Past earnings statements from GE (GE: Research, Estimates) only broke down results to the division level, not to the 26 subsidiaries that will now report financial data. GE also will give details about results from recent acquisitions, and how much of the growth of company earnings is due to acquisitions, how much is due to cost-cutting and productivity improvement efforts, and how much is due to gains at existing businesses.

The call is due to start at 9 a.m. ET, following an 8:30 a.m. earnings release. Leading the call will be GE Chief Financial Officer Keith Sherin. The call will be available through webcast on the company's investors' web site.

"I hardly expect to have any surprises," said Nicholas Heymann, analyst with Prudential Securities. "The surprise will come from GE helping people understand what can be done and will be done in the future. Instead of telling you a bunch of random numbers, we in fact may have ability to build a relevant quarterly earnings model."

Analysts surveyed by earnings tracker First Call have a consensus earnings per share forecast of 35 cents, up from 30 cents a year earlier. Those EPS estimates only range from 34 to 36 cents. The company announced Feb. 5 that it expected to hit that 35 cent a share forecast, and that it was comfortable with full-year EPS forecasts of $1.65-to-$1.67, up from $1.41 it earned last year. It repeated that full-year earnings guidance on March 18.

GE spokesman Dave Frail said the new information being released as part of quarterly earnings statement is part of an emphasis of CEO Jeffrey Immelt, who assumed the top job at the company last September. Frail said that there was a push to provide more detailed information that predates investors' new focus on financial disclosure that was prompted by the collapse of energy trader Enron Corp.

"Certainly they (new disclosures by GE) coincided with the Enron case," said Frail. "As to whether it was stimulated by concerns in the marketplace, the reason for us doing it is in response to requests from investors."

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Frail said even the new information was often available in the past deep inside filings with the Securities and Exchange Commission. But Noel Dedora, managing director and senior portfolio manager for Fremont Investment Advisors, said that the greater information in the earnings release or the conference call will provide a welcome assist to investors.

"I doubt we'll hear anything there we wouldn't have found out otherwise, but it's easier to have them tell us than dig it out of the 10-K and 10-Q," said Dedora, who has a large GE position in his fund. "What's going to happen to the stock as a result will depend on what they have to say."

Heymann said he believes the greater information should give investors more confidence about the growth prospects for the blue-chip behemoth.

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"It's lifting up the table cloth and seeing it's not just one leg balancing the whole table," he said. "You've got a company with tremendous amount of resources and this will show how the resources are being deployed for future growth. GE is bending less and less metal. They're outsourcing final assembly. You're likely to see a continued improvement on return on investment."

Shares of GE, one of the 30 components of the Dow Jones industrial average, gained 75 cents, or 2 percent, to close Wednesday trading at $37.20.  Top of page


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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.