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GE Q2 2008 Earnings – The Greening Continues

July 11, 2008 11:22 pm by Dean Morel

Windpower

This is one of the primary reasons I invest in GE, more on that another day.

Today it’s Q2 earnings time.

So it’s time to go to the source.

Press Release

Main Presentation

Supplemental Data

Always go directly to the source. Rather than read a Reuters or some other press release on a company’s earnings, go straight to the source. Go the company’s investor relations page on their website to get the information from the horses mouth. If it’s a company you invest in then sign-up for the investor alerts.

For those too busy to read the releases or listen to the conference call (I’ll wait for the transcript) here is the bottom line:

  • GE are on track for a $2.20-2.30 year and in the pre-market you can buy them for 12x that.
  • Flat earnings of $0.54 from continuing ops in the current global environment highlights their strength.
  • Infrastructure growth strong. Revenue growth up 26%, profit up 24%. No surprise here. Jeff Immelt is attempting to reignite growth by transforming General Electric in to Green Electric.
  • GECC (Capital Corporation) in good shape (they say terrific) no external capital infusion needed.

Hey remember what I said, don’t bother reading this go straight to the source. Check out the main presentation at least.

The bottom line is GE continue refocusing their business on two of the largest growth segments for the next 30 years. Energy and Healthcare.

According to Mohnish Pabrai, a business with no growth, but consistent cash flows, should be valued at 10x cash flow plus excess capital. A growing business should be valued at 12-15x cash flow plus excess capital. I’ll leave you to work out if GE is good value. Or for those with more interesting things to do I’ll include it in my coming GE write-up.

Cheers

Dean

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