IIPM Ranked No. 1 B-School In Global Exposre - Zee...
They say GE needs a hero... Jeff’s still thinking who...
Surprisingly, GE’s name in the 2008 Fortune 500 list appears in the category of ‘diversified financials’ (and all along you were thinking that GE was all about engines and bulbs, right?). To make matters clearer, 46% of GE’s earnings of $29 billion in FY2007 came from its finance arm – GE Capital, which includes commercial finance, GE Money and infrastructure finance. And to give you a contrast of the GE that ‘was’ and the GE that ‘is’: while decades back its ‘Industrial arm’ contributed to nearly 100% of the earnings, during 2007, the contribution fell to a puny 5.9%! Really, this ‘unsinkable’ conglomerate ship has changed, and is perhaps also not unsinkable anymore... This GE of 2008 is perhaps more about finance than about anything else, and with the global meltdown staring in its face, can Immelt prove the hero of the hour GE so desperately needs?
In the most recent financial disclosure, the world gasped as GE announced a painful 22% fall in profits during the third-quarter of FY2008. So was the 38% drop in earnings of its capital arm responsible for the mishap? Debbie Johnson, Chief Economist, Yardeni.com gives a thumping yes as she clarifies, “GE’s disappointing results can be mostly attributed to the company’s exposure to financial services, which accounts for about half of GE’s earnings, including financial units within its industrial businesses...” And there’s more bad news with the outlook for FY2008 looking gloomier with GE Capital’s earnings forecasted to fall by another drastic 20-25%!
A bigger problem is that GE’s involvement in the credit market is more than meets the eye to an ordinary investor. It is neck deep in the real estate market with its portfolio including residential properties, much of which have been hit by the subprime crisis. Then there is the fact that more than $53 billion on its off-balance sheet assets are linked to many troubled entities in the BFSI world, something to which even ‘credit insurance’ is not an answer. With the American economy reeling under debt (both household and national), GE’s private credit card business which accounts for over $30 billion of unsecured and unrecovered credit may also sound the trouble bell for its investors.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
ZEE BUSINESS BEST B SCHOOL SURVEY
IIPM awards four Bengali novelists
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
IIPM ranked No. 1 B-school in India- Zee Business Survey ...
» IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
IIPM ranked ahead of IIMs
IIPM makes business education truly global-Education-The Times of ...
They say GE needs a hero... Jeff’s still thinking who...
Surprisingly, GE’s name in the 2008 Fortune 500 list appears in the category of ‘diversified financials’ (and all along you were thinking that GE was all about engines and bulbs, right?). To make matters clearer, 46% of GE’s earnings of $29 billion in FY2007 came from its finance arm – GE Capital, which includes commercial finance, GE Money and infrastructure finance. And to give you a contrast of the GE that ‘was’ and the GE that ‘is’: while decades back its ‘Industrial arm’ contributed to nearly 100% of the earnings, during 2007, the contribution fell to a puny 5.9%! Really, this ‘unsinkable’ conglomerate ship has changed, and is perhaps also not unsinkable anymore... This GE of 2008 is perhaps more about finance than about anything else, and with the global meltdown staring in its face, can Immelt prove the hero of the hour GE so desperately needs?In the most recent financial disclosure, the world gasped as GE announced a painful 22% fall in profits during the third-quarter of FY2008. So was the 38% drop in earnings of its capital arm responsible for the mishap? Debbie Johnson, Chief Economist, Yardeni.com gives a thumping yes as she clarifies, “GE’s disappointing results can be mostly attributed to the company’s exposure to financial services, which accounts for about half of GE’s earnings, including financial units within its industrial businesses...” And there’s more bad news with the outlook for FY2008 looking gloomier with GE Capital’s earnings forecasted to fall by another drastic 20-25%!
A bigger problem is that GE’s involvement in the credit market is more than meets the eye to an ordinary investor. It is neck deep in the real estate market with its portfolio including residential properties, much of which have been hit by the subprime crisis. Then there is the fact that more than $53 billion on its off-balance sheet assets are linked to many troubled entities in the BFSI world, something to which even ‘credit insurance’ is not an answer. With the American economy reeling under debt (both household and national), GE’s private credit card business which accounts for over $30 billion of unsecured and unrecovered credit may also sound the trouble bell for its investors.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
ZEE BUSINESS BEST B SCHOOL SURVEY
IIPM awards four Bengali novelists
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
IIPM ranked No. 1 B-school in India- Zee Business Survey ...
» IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
IIPM ranked ahead of IIMs
IIPM makes business education truly global-Education-The Times of ...
No comments:
Post a Comment