General Electric (GE) just hit a new 52-week high today thanks to a bullish statement from the firms CFO and the promise to growth dividends again in 2011.
Specifically, General Electric CFO Keith Sherin told an investor conference: “We have very good visibility around our cash flow … If you think about 2011 for us, we believe we’re going to have earnings growth. We plan to resume growing the dividend again in 2011.”
The company has stopped giving investors earnings-per-share targets, however GE execs said they expect 2010 profits to be about on par with 2009.
In January, GE posted a 19% slump in fourth-quarter profits, weighed down by poor results at its entertainment and finance units. But the stock has been on the rise lately thanks to plans to redeploy resources to cover losses at GE Capital due to mortgage troubles and is shrinking the unit. GE also announced in recent months that it will sell a controlling stake in NBC Universal to cable provider Comcast Corp. (CMCSA), as well as sell its security business to focus on more-lucrative industrial operations.
General Electric seems to be on to something — or at least, that’s what investors think. GE was brutalized by the financial crisis due to its financial arm, and would up slashing its dividends to save the struggling conglomerate billions of dollars and stay profitable. The move has allowed General Electric to top Wall Street estimates in each of the last four quarters, but now it appears the company is moving back into growth mode and prepared to give some of that cash back by resuming dividend increases.
GE stock is still down more than 50% from its 2007 levels and is about a third of its value at its peak in late 2000. Still, shares have more than doubled since bottoming out at around $7 in March of 2009.
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