Market briefing --- Lane (fast)
G.E. --- Bob (fast)
London markets --- Mark (slow)
>> the dow jones industrial average down by 70 points at 10,055 -- g.e. shares on the move after the company said third-quarter earnings were in line with analysts’ estimates. bob bowden has the details after filing this report.
>> general electric profits rose 11% in the third quarter as acquisitions and economic growth spurred the biggest quarterly sales increase since jeff immelt took over as chief executive from jack welch. the headline number, g.e. third-quarter net income was 38 cents a share up from 36 cents a share in the same period a year ago. the 38-cent figure met analysts’ estimates. third-quarter revenue of 38.27 billion was 15% higher than last year and exceeded the analysts’ estimates of $38.1 billion. general electric raised the low end of its full-year forecast to a range of $1.57 to $1.60. for next year, g.e. forecasting 10% to 15% earnings growth and if you back out per-share figures from that forecast, that amounts to $1.73 to $1.84 a share, presenting a midpoint a half penny above the analysts’ estimates. chairman jeff immelt made bullish remarks. comments from the conference call, first, jeff immelt is hiring, sales and marketing , technical and service employees and sees that hiring in 2005. he sees dividends rising more or less with g.e. earnings and third, immelt says g.e. has been able to raise prices across many units, particularly equipment businesses. immelt has agreed to more than $60 billion in acquisitions in higher growth areas such as healthcare, consumer credit and water treatment. meanwhile, he’s sold more than $14 billion in less profitable financial areas such as insurance and g.e.’s satellite business. mike blatt is portfolio manager with chemung canal trust and reacted to g.e.’s forecast of 10% to 15% earnings growth in 2005.
>> i think the double-digit growth is kind of baked in well, not baked in but the acquisition of amersham and nbc universal gives them headwinds to reach that but if you take a longer term look at it, by getting rid of the lower return businesses, it will increase their return on capital which has suffered over the last three or four years.
>> year to date, general electric shares have been the sixth best performers among the dow industrials. they are up about 9% year to date.
>> bob bowden reporting. and for the day, shares of general electric down 21 cents at $33.74. let’s now look at what’s expected for the markets next week in europe. mark barton has the report from london.
>> starting with economic matters, u.k. producer prices released for the month of september. economists expect the cost of goods leaving british factories to rise 2.8% in the month as producers pass on some of the costs of higher energy prices to customers. the fastest economic growth in almost four years is allowing some manufacturers to raise prices, reflecting the higher cost of oil and metals. the bank of england’s monetary policy committee has lifted rates five times since november to ward off inflation. in august, the bank said consumer price growth may breach its 2% target in two years. on the corporate front, deutsche lufthansa releases traffic figures for september. in august, europe’s third biggest airline reported a 13.9% rise in passenger numbers as it increased seating capacity and flights. this week, goldman sachs cut earnings estimates at european airlines saying record high oil prices will boost costs for the companies. in august, the international air transport association said airlines may lose as much as the combined $6 billion this year if oil prices stay above $44 a barrel. just sticking with travel, swiss international airlines reports september traffic figures. switzerland’s national carrier reports a 20% fall in passenger numbers in august after it cut routes to save money. last month, the airline said it signed a credit facility for $257 million, allowing it to take the necessary steps to compete. swiss international created from swissair almost three years ago had planned to join the one world carrier airlines with a.m.r.’s american airlines and british airways until talks broke down. for bloomberg news in london, i’m mark barton.
>> well, markets friday in europe declined. but the report didn’t hurt the bond market any. a check on 10-year notes on the day yielding 4.13%, up 29/32, nearly a full point. still ahead, raw material stocks have been reaping rewards for investors. paper company smurfit stone container is one of the winners. we’ll hear from its chief financial officer after this break.
