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GE Stays on Track

Jack Uldrich
April 13, 2007

Last night, my hometown baseball team, the Minnesota Twins, beat the Tampa Bay Devil Rays on a ninth-inning home by 2006 American League MVP Justin Morneau. I mention this because in this morning's conference call regarding General Electric's (NYSE: GE  ) first-quarter earnings, CEO Jeffrey Immelt encouraged analysts to think of his company as being in the "first inning of a nine inning-game."

I fully understand the point, but investors who have frustratingly watched GE's stock tread water since the turn of the century,can be forgiven for wondering whether the past seven years were just a painfully long rain delay.

In truth, GE is playing a lot of games all at once. The company is incredibly diverse, involved in areas as far-flung as commercial finance, aeronautics, medical diagnostics, alternative energy, and entertainment. As such, trying to make sense of GE on the basis of a single quarter makes about as much sense as trying to determine which team will win a baseball game after a scoreless first inning.

In GE's 2007 first quarter, the score was essentially zero-zero. The company's earnings from continuing operations for the quarter rose 8%, from $4.2 billion to $4.5 billion year over year, i