On Jan. 19, anything-and-everything conglomerate General Electric
- Earnings growth looks great -- until you remove the effect of discontinued operations from both reporting periods. On an apples-to-apples basis, earnings per share increased a more modest $0.08 from last year's $0.56 of income per share from continuing operations.
- The balance sheet and cash flow figures discount the GECS financial services arm, as those huge numbers would overwhelm the results from other operations and make the conglomerate look like a bank. Including GECS, GE had $62 billion of cash on hand, $334 billion in receivables, and $433 billion of borrowed money.
- For General Electric, discontinued operations are more a way of life than a one-time adjustment. The company is looking for buyers for its plastics segment and exploring acquisition opportunities in other areas like oil and gas, aviation, and health care -- including a just-announced $8.1 billion deal to buy the diagnostics business of Abbott Labs
(NYSE:ABT) .
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q4 2006 |
Q4 2005 |
Change |
|
|---|---|---|---|
|
Sales |
$44,621 |
$40,282 |
10.8% |
|
Net Profit |
$6,576 |
$3,163 |
107.9% |
|
EPS |
$0.64 |
$0.30 |
113.3% |
|
Diluted Shares |
10,326 |
10,563 |
(2.2%) |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q4 2006 |
Q4 2005 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
33.7% |
31.8% |
1.9 |
|
Operating Margin |
16.9% |
17.0% |
(0.1) |
|
Net Margin |
14.7% |
7.9% |
6.9 |
Margins are the earnings engine. See how they work.
Management Effectiveness
Q4 2006 | Q4 2005 | Change* | |
|---|---|---|---|
Return on Average Assets | 6.0% | 3.0% | 3.0 |
Return on Average Equity | 23.5% | 11.4% | 12.1 |
See how management puts its financial tools to work.
Balance Sheet Highlights
Assets | Q4 2006 | Q4 2005 | Change |
|---|---|---|---|
Cash + ST Invest. | $4,800 | $2,500 | 92.0% |
Accounts Rec. | $14,300 | $15,100 | (5.3%) |
Inventory | $11,300 | $10,315 | 9.5% |
Liabilities | Q4 2006 | Q4 2005 | Change |
|---|---|---|---|
Borrowings | $11,300 | $10,200 | 10.8% |
Learn the ways of the balance sheet.
Cash Flow Highlights
FY 2006 | FY 2005 | Change | |
|---|---|---|---|
Cash From Ops. | $14,780 | $13,793 | 7.2% |
Find out why Fools always follow the money.
Related Companies:
- Walt Disney
(NYSE:DIS) - Affymetrix
(NASDAQ:AFFX) - Agilent Technologies
(NYSE:A) - Caterpillar
(NYSE:CAT) - Eastman Chemical
(NYSE:EMN)
Related Foolishness:
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Disney is a Motley Fool Stock Advisor pick, and Affymetrix is an official Rule Breaker. Read up on GE's competition with a free 30-day trial to either service, or both.
Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.
At the time of publication, Anders Bylund was a Disney shareholder but had no other position in any company mentioned. Fool rules are here.
