GE's total revenues improved by 4% to $35.4 billion. The maker of everything from airplane engines to medical devices to wacky TV sitcoms earned $3.102 billion, or $0.31 a share. That's a 21% drop from last year's $3.993 billion, or $0.39. The reinsurance charge cost the conglomerate $1.5 billion.
Some of its properties excelled during the quarter. Among them was NBC, which delivered a 14% pop in profits easier than Rachel delivered that little darling Emma. (Requisite baby cuteness acknowledgment: Awwwww.) NBC also benefited by $514 million as a result of its purchase of cable channel Bravo.
Its commercial finance division produced a 30% gain in income, while its consumer finance unit returned 15% growth. The aircraft-engine segment grew profits by 1%. And that's about where the good news ends for the quarter.
The company's power systems unit, which makes gas turbine engines, experienced a decline in profits of 16% from last year. This has been an important income generator for GE over the last several years, so that smarts. It expects sales of its gas turbine engines will continue to slow through 2003, but it says other power businesses will pick up the slack and grow earnings for the division 20% or more. We'll see.
GE's consumer products division, which includes things like all the light bulbs and sub-zero fridges it churns out, saw a 32% drop-off in income. The company's plastics division melted, with profits down 36%.
The first quarter of 2003 doesn't look much brighter. It expects first-quarter profits to fall 5% to 10% compared to a year earlier. Income for the power systems group may fall as much as 50% in the quarter.
For all of 2003, GE's earnings are expected to grow 3% to 13%. (How's that for a wide berth?) Earnings grew by only 7% for 2002. It appears the storied double-digit earnings growth guaranteed for years by former CEO Jack Welch may be but a memory for investors, at least until the economy strengthens.