Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.
I enjoy reading your contributions to The 'Ville. I was just looking at your GE piece, after having quickly run through the numbers in their release and listened to the call this morning. Needless to say, I am not impressed with the results that are being highlighted by Immelt & Crew. If analysts/investors tried to perform an apples-to-apples comparison of 2Q04 vs 2Q03, I do not believe they would be buying today. The only reason GE showed y/y revenue and earnings growth is because they are a larger company now vs last year; they only show growth through acquisition. GE Industrial assets increased 33% y/y, much higher than the growth at any of their lines of business. Goodwill and intangibles are up 47% through the first half of 2004. If you look at ROA, this metric actually decreased y/y, from 0.573% to 0.563%. The ROA deterioration alone suggests that these acquisitions are a drag on the business.
I have no position in the stock, but I am interested in GE as a tell for the economy. Based upon their report, I'd say business is not booming. Anyway, thanks for quality work. I look forward to reading more of your posts.
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