2 Industrial Giants Consider New Business Opportunities

Two Industrial giants in the Dow Jones Industrial Average, Boeing and General Electric, are considering adding new products to their portfolios.

Feb 12, 2014 at 3:00PM

The Dow Jones Industrial Average (DJINDICES:^DJI) is trading fairly flat today, down only 0.31% by midafternoon. One factor that helped stocks rise early, although some investors remain skeptical of the information, was Chinese trade data showing solid demand for the nation's goods. If the figures are accurate it would help ease worries that the world's second-largest economy is stuck in a slowdown. With that in mind, and as investor focus in the U.S. turns to the Senate debt-ceiling suspension vote, here are some companies making headlines today.

Inside the Dow, General Electric (NYSE:GE) is contemplating adding helicopters to its portfolio of rental assets in its GE Capital Aviation Services business segment.

"We've gotten into turboprops, regional jets, cargo planes," Norm Liu, the unit's chief executive officer, told Bloomberg. "We have to look at new adjacencies -- we're looking at helicopters."

No official decision has been made regarding adding helicopters to GE's leasing division which operates a fleet of more than 1,620 aircraft. However, the move makes sense for investors as the business steadily expanded from commercial airliners to regional jets and business jets before getting into turboprop aircraft about three years ago. As General Electric continues to distance itself from the issues GE Capital brought during the financial crisis, investors should cheer any move to improve the company's industrial, aviation, or oil and gas businesses. GE still has strong growth potential in its strongest businesses and should warrant a spot on investors' watchlists as the company continues through a transitional period in 2014. 

In other industrial news, Boeing (NYSE:BA) is trying to size up the market potential for a new medium-size plane for transcontinental flights, such as New York to Los Angeles trips, that are valuable because of high-priced premium seats. That midrange airplane would help fill the hole left by Boeing's 757 which went out of production in 2004.

"There is ample demand for an aircraft a notch or two above these two variants in size and slightly longer in range that would be positioned where the 757-200 and 757-300 used to sit," Douglas Runte, a Deutsche Bank AG analyst, told Bloomberg. "An all-new aircraft in this size or even slightly larger would allow the company to optimize passenger capacity and range and even potentially adopt an interesting interior layout."

While a gap will clearly exists as the 757s still in operation age, it's unclear how large of a market it truly represents; some airlines have ordered Boeing's 737-900ER or Airbus' A321-200 to take over some of the flying duties the 757 once held. If the market remains the size of the 757 planes still in operation, that would be a bit less than 1,000 planes -- that probably wouldn't put it at the top of the priority list for the folks at Boeing.

While the idea of filling a gap in the market is good news for investors, Boeing's execution of ramped-up production of its commercial airplanes will be the deciding factor on its financial performance this year. 

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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.

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