General Electric Drops Despite Solid Quarter, and Johnson Controls Sells Automotive Electronics Business

2013 was a good year for GE, which continues to focus on its industrial business and should be poised for a better 2014.

Jan 17, 2014 at 3:00PM

The Dow Jones Industrial Average (DJINDICES:^DJI) is trading 0.39% higher as the market digests economic data and earnings reports today. U.S. housing starts fell 9.8% to 999,000 in December from the previous month. Despite the drop, it was still higher than economists' expectations of 975,000 starts. To keep this in perspective, housing starts in 2013 were up 18.3% from 2012 levels. In other news, U.S. industrial production rose 0.3% in December from the previous month, which was in line with expectations, and production was up 3.7% for the year. Keeping with the theme, here are some industrial companies making headlines Friday as we close out the trading week.

General Electric (NYSE:GE) is 2.7% lower in midafternoon trading despite posting a strong fourth-quarter earnings result. General Electric reported this morning that revenue was up 3% in the fourth quarter to $40.4 billion, and up to $146 billion for the full year. The company also posted operating earnings of $5.4 billion, or earnings per share of $0.53.

Two things stuck out in GE's report: value returned to shareholders and its industrial business. GE's industrial segment profit rose 12% to $5.5 billion, with six of its seven segments reporting positive earnings growth. Moreover, GE's backlog of equipment and services hit a record high at $244 billion; that's a $15 billion increase from the last quarter.

As far as returning value to shareholders goes, General Electric has been consistent. As it continues to repurchase shares and increase its dividend, it will form an "X" when charted.


GE Dividend data by YCharts.

During the fourth quarter GE announced a 16% boost in its quarterly dividend, which was its fifth increase in slightly more than three years. GE also repurchased $10.4 billion of stock. Between the buyback and dividend payouts, the company dished out $18.2 billion in value back to shareholders.

Johnson Controls (NYSE:JCI) is down slightly after agreeing to sell off its automotive electronics business for $265 million to Visteon. This comes after Johnson Controls sold its HomeLink product, also part of its electronics business, to Gentex for $700 million in September. Johnson Controls is also expected to sell its automotive interiors business, which generates $4.2 billion in sales but at a low profit margin. As such, these aren't moves that will change Johnson Controls' yearly guidance too much. The electronics and interiors businesses were expected to contribute only $0.05 per share out of its annual $3.27 per-share earnings.

3 stock picks to hold forever
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Fool contributor Daniel Miller has no position in any stocks mentioned. The Motley Fool owns shares of General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers