Interview: G.E.
Nasdaq --- Robert (slow)
>> all right, folks. we’re back. general electric poses a rise as fourth quarter profits, acquisitions and demand helping to drive the biggest sales gain since jeffery immelt took over as chief executive. greg miles has this report.
>> a very optimistic c.e.o. jeff immelt on the conference call today saying we enter 2005 with a lot of momentum. he sees a broad-based recovery for many of g.e.’s businesses in the year 2 thoid 5 and much of that based on what we’re seeing here in the fourth quarter, the latest announcement this morning. earnings per share came out at a penny ahead of expectations, at 51 cents a share. revenues quite impressive at $43.7 billion, that was $800 million better than analyst forecasts, up 18% in the fourth quarter. now most analysts were forecasting a gain in revenues of only 14%. we must keep in mind that this includes a lot of acquisitions in 2004 to help the company in 2005. now let’s look at the specific businesses, how they did in the quarter. by the way, orders up 19% during the period. very strong. advanced materials, essentially plastics, profit gain of 2%. commercial finance up 12%. consumer finance reflecting the strength of the consumer across the u.s. and the world, profits up 26% and consumer and industrials, a grab bag, including the appliance business, washing machines, etc., profits up 32%. much higher than many analysts forecast. now let’s look at two business lines or segments that are benefiting from acquisitions. health care, profits up 50% from that amersham acquisition, helped by that acquisition. nbc universal, profits up 60%, again benefiting from that vivendi acquisition early last year. now let’s take a look again at two businesses that really had problems in the past few years, which hurt g.e.’s business. this is transportation and energy. transportation up 22%, as far as profits. but energy, that’s powers turbines for utilities, their profits are down 21% for the quarter, reflecting continuing problems with that business. but a number of analysts and also mr. immelt forecast that this business is going to have earnings gains of more than 10% in the year 2005. also mr. immelt confirming today his forecast of 10% to 15% per share profit growth for 2005 and also continuing progress in 2006. greg miles, bloomberg news.
>> there’s g.e. today. you’re down 24 cents, works out to .7 of 1% the past 12 months. the stock is up about 3.5%. if you stir in dividends, that brings the total return up to 6.5%. the nasdaq fell to its loast level since november 4. robert grey has details on the trading today with this report from the nasdaq market site.
>> it was earnings concern and higher crude oil prices that sent the nasdaq to that lowest level since early november, finishing the session on friday afternoon at just about the lows of the day and, of course, for the week as well. talking to the strategist over at cantor fitzgerald telling me that there’s just not enough excitement about earnings forecast for the first quarter to lift stocks and send them on a rally. says that even with microsoft coming up, that microsoft just doesn’t have the will to carry the market on its back. it’s just not enough recovery of exex spending late last year and early this year, they’re not pointing to enough capital spending to send tech stocks higher, particularly here on the nasdaq. we did see crude oil prices rising on friday and that send the transports down lower, almost in direct correlation, as crude gained the transports here on the nasdaq falling. some of the airline stocks getting hit the worst. you had jetblue, northwest airlines, also frontier airlines falling. we did see ebay was a big sorry this week, had disappointing earnings out this week, getting downgraded by six different analysts on thursday. by friday, the stock turning around, bouncing off the lows off one of its worst sessionings ever as a publicly traded stock and raised to a buy at legg mason with a $100 price target on it. if you think about it on thursday, it opened above $100 a share. so, there you have that. and sirius satellite radio also rising, one of the biggest gainers in the nasdaq00 on friday, extending its nonexclusive contract to air nba games and the stock rising on that news. there are also a couple of i.p.o.’s on friday. c. bryant insurance holdings began trading. gaining 15% in tide’s trading and viacell, gaining 24% on its first day of trading on the nasdaq. i’m robert gray.
>> lam research out with some mixed results. they had better-than-expected earnings, but the revenue was a little bit light. the chief executive says he expects orders to be down 15% to 20% this quarter as well.
>> i think that’s a reasonable assumption that we’ll be weaker in the first two quarters of this year than we were, say, the last two quarters of 2004 then we’ll begin to see strength in the last half of 2005.
>> he says companies will have to spend for new technology later in the year and he says lam continues to have pricing power.
>> i think we’re in a pretty good position. our products are in a leadership position. they are providing capabilities that our customers can’t get from our competitors. so, i think that we’ll be able to price reasonably.
>> the stock up 1.5% today, over the past year up―excuse me, down 20%. well, oil prices on the rise again. you can blame a lot of things -- freezing cold weather in the northeast, elections approaching in iraq, supply concerns. we’re going to wrap up the commodity prices and see how we end it next.
在线播报
Listen Market briefing --- Matt (slow)
NYSE --- Julie (slow)
Earnings report --- Su (fast)
Powell's decision --- Peter (fast)
>> this is “world financial report.” i’m matt nesto. thanks for tuning in here. let’s talk about wall street and how we did this friday, shortened week of trade. just four days because of the holiday. monday, martin luther king day. you see the dow down three quarters of a percent. 765, we’ll call it that. volume at the nyse, 1.6 billion shares and to the nasdaq we go. they did just about two billion there. pretty much evenly split there in terms of rising stocks versus those on the slide. university of michigan’s gauge of consumer sentiment slipped this month. a preliminary survey has the index down more than a point from december’s reading. it is the first drop in three months. it is alsos the 15th month, though, with a reading above 90. that pushed treasuries higher today. bonds, check it out. 4.4 -- 4.14% of debt, up 5/32. in the middle, you are up 6/32 on the five-year note and the shorter end of the curve, two years of debt now at 3.14%, up 3/32. that consumer confidence number weighed on the dollar, plus technical indicator, a signal a rise in the euro. how does it play out? you bought less yen for your dollar, in fact less than 103. you see the euro and the pounds both up versus the dollar. sox dropped for a third week in a row this week. for more on the trading today, let’s get this report from julie hyman at the big board.
>> a losing session for stocks today to cap off a losing week. let’s talk about some of the statistics to describe today’s session and also 2005 to date. first of all, the s&p 500 and the dow jones both closing at their lowest since november 10. the dow with its declines for the year-to-date now has wiped out all of its gains from 2004. it is down 3.6% for the year. only five stocks in the dow rose in today’s session. also want to note that this is the third weekly decline for both the dow and the s&p. we haven’t seen a start to a year like this since 1982 for the dow and 1990 for the s&p. although the dow did end up finishing 1982 higher where the s&p finished 1990 lower. i’ve been talking to investors to try to figure out what’s going on? why have we seen so much selling? ? and there is a lot of confusion, people scratching their heads why this is happening. i talked to edgar peters and he says it is a bit of a mystery what is going on here. people seem to be waiting for a catalyst to come into the market . it’s not clear what that catalyst might be. however, he and other folks i talked to caution that three years does not a year make. we shouldn’t necessarily take this three-week decline to be a precursor of what we could see for the year overall. also in today’s session, another factor for the drop we saw was the rise in price of oil. because of airline stocks hit hard today, the amex airline index down more than 3.5% and earnings that reported their earnings this week said the fuel costs hurt their bottom line. we saw all of those stocks depe declining in today’s session along with the group. some of the other declines in today’s session, if you look at the groups doing the worst, household makers, auto stocks and hotel restaurant and leisure, spread across various industries and the biggest decline we saw in the dow today, again only five stocks higher, 3m, pfizer, procter & gamble, and boeing leading that list. i’m julie hyman, bloomberg news at the new york stock exchange.
>> well, earnings season going to get really going next week. investorses will hear from about one-third of the s&p 500 companies next week. that means by this time next week we will have heard from about half of the s&p 500 companies. what is it looking like so far?
>> so far we have 15% of the companies reporting and while it’s still early in the season, two trends are emerging. a great than average number of companies are exceeding estimates and yet many of the same companies are sowning more cautious than expected on outlook. motorola kicked off the week on a bullish note saying profit surged by more than one third and then disappointed analysts and investors with a more conservative forecast. ebay will likely remain one of the biggest earnings stories of the quarter. remember after fourth quarter profit rose less than expected, it cut its first quarter forecast. today’s shares rebounded from yesterday’s 19% plunge. that’s the second biggest one-datummable in the history of the stock. now according to analysts surveyed by thomson financial, earnings growth in the final three months of last year probably slowed to an average of 16.5%. that’s down .3% from the previous quarter and in the view of r.b.c. dane rarbger’s analyst it sounds a theme for 2005 -- falling growth. >> we’ve had four out of the last five quarters at 20% year-over-year earnings growth and what we’re running into right now is that companies are starting to have a tougher hurdle compared to the fourth quarter of 2003.
>> well, let’s go to the score card of the 114 s&p 500 companies that have so far reported first quarter results, about 66% beat analyst estimates. 17% missed and 18%, they matched. well, for comparison on an average basis over the past decade, 59% of companies typically exceed expectations, while 20% trail and 21% are in line. again, that is according to figures from thomson financial. same company also projects first quarter earnings will rise 7.8%, compared with last year and that’s a boost from their new year’s day projection. estimates come down as the quarter progresses. the president of merrill lynch investment expects the overall earnings performance to be a plus for the market .
>> our view is profits will be good enough, but not as good as the consensus. long-term earnings growth in the u.s., seven. if we get a 7% growth rate on top of two 20% years, that would be great news.
>> he’ll take it. here’s news for you. among the earnings out next week, merck, american express, procter & gamble, merrill lynch. you can probably come up with 100 names, but gotta go.
>> time is tight. thank you, su. appreciate it. here’s news for you. after four years atop the federal communications commission, michael powell is stepping down as chairman. officially in a statement this afternoon, powell confirmed a widely speculated resignation, saying he’ll leave effective some time in march. bloomberg’s peter cook is in washington with more on powell’s decision and possible replacements. peter?
>> and michael powell’s four years as chairman of the f.c.c. will be remembered for his not always successful effort to further deregulate the communications industry. in his statement, powell thanked the president for the opportunity to serve, adding, quote, having completed a bold and aggressive agenda, it is time for me to pursue other opportunities. let someone else take the reigns of the agency. now powell said the seeds of his policies are starting to blossom. his statement cites the expansion of broadband from 5.1 million homes in 2000 to 34.1 in 2004. and advances in digittal technology and the create of the do-not-call list. support s say he never strayed from his push for deregulation.
>> michael powell was the rarest of species. he was a rational regulator who really did believe in free markets . he stressed capitalism over central planning and he pushed that vision in all of the things he did for the most part while he was at the f.c.c.
>> now powell, however, sometimes faced resistance within the f.c.c. on occasion. also within congress and the courts. most notably he failed to overcome legal challenges to rules he advocated that would have allowed more media consolidation. one commission democrat says powell accomplished a lot, but concedes they did not always see eye to eye.
>> i certainly enjoyed working together. we didn’t always agree on everything. media ownership was an area that we had a major division, as to whether or not we should allow large media companies to grow even larger. we agreed on some thing, like wireless. we made progress on making spectrum available.
>> now the two republicans remaining on the commission, kathleen aber nah thi and kevin martin are possible replace. s. michael gallagher and rebecca klein will also get consideration. one person not upset with powell’s departure? howard stern who called today a great day for broadcast. powell’s policies cost viacom a record $3.5 million in november. matt?
>> thank you. appreciate it very much. also out today, we have results from general electric. the profits surged nine of 11 of their main business units showed increases of at least 10%. we’re going to break down general electric’s numbers when we return.
