General Electric
...ss the company and around the world into action across 13 businesses so rapidly that all the initiatives have become operational across the company within one month of launch, and have always produced positive financial results within the first cycle. The operating system allows GE businesses to reach speeds and performance levels unachievable were they on theirs own. General Electric Company operates in the Misc. business credit institutions sector. This analysis compares General Electric with three other large diversified multinational conglomerates: Investor AB of Sweden (2003 sales [US$423.99 million]), Siemens AG of Germany [US$88.27 billion]), and Matsushita Electric Industrial Co., Limi which is based in Japan (US$66.64 billion] General Electric reported sales of $133.59 billion for the year ending December of 2003. This represents an increase of 2.2% versus 2002, when the company's sales were $130.73 billion. Sales of Consumer Finance saw an increase that was more than double the company's growth rate: sales were up 25.1% in 2003, from $10.27 billion to $12.85 billion. General Electric also saw significant increases in sales in Insurance (up 12.4% to $26.19 billion) and Commercial Finance (up 17.6% to $18.87 billion) and Others (up 7.4% to $12.77 billion) . Not all segments of General Electric experienced an increase in sales in 2003: sales of Power Systems fell 19.5% to $18.46 billion. General Electric also experienced decreases in sales in Aircraft Engines (down 3.9% to $10.70 billion) and Ind'l Prod and Systems (down 13.9% to $8.40 billion) and Consumer Products (down 2.1% to $8.28 billion) . Most of the company's 2003 sales were in its home market of the United States: in 2003, this region's sales were $84.80 billion, which is equivalent to 63.5% of total sales. In 2003, sales in other countries were up at a rate that was much higher than the company as a whole: in this region, sales increased 44.5% to $13.12 billion. General Electric also experienced significant increases in sales in Europe (up 25.5% to $30.51 billion) . Although the company's overall sales increased, sales were not up in all regions of the world: sales in the company's home market of the United States were down 0.6% (to $84.80 billion) . During 2003, the company's sales increased at a faster rate than all three comparable companies. While General Electric enjoyed a sales increase of 2.2%, the other companies saw smaller increases: Investor AB sales were were down 17.2%, Siemens AG decreased 11.6%, and Matsushita Electric Industrial Co., Limi experienced growth of 1.1%. General Electric currently has 305,000 employees. With sales of $133.59 billion , this equates to sales of US$437,984 per employee. The sales per employee levels at the three comparable companies vary greatly, from US$211,673 to US$674,071, as shown in the following table. Some of the variation may be due to the way each of these companies counts employees (and if they count subcontractors, independent contractors, etc). In recent years, this stock has performed terribly. In 2000, the stock traded as high as $60.50, versus $30.00 on 5/7/04. During the past year, the stock of General Electric has performed significantly worse than the three comparable companies, which saw gains between 34.1% and 57.3%. During the 12 months ending 3/31/04, earnings per share totalled $1.55 per share. Thus, the Price / Earnings ratio is 19.35. Earnings per share rose 2.6% in 2003 from 2002. Current Ratio Debt Ratio 493,822,000 750,330,000 206,280,000 206,280,000 This company is currently trading at 2.26 times sales. The three companies vary greatly in terms of price to sales ratio: trading from 0.49 times all the way up to 17.86 times their annual sales. General Electric is trading at 3.76 times book value. At the end of 2003, this company's intangible assets were quite sizable, at $55.03 billion, while the total common equity stood at $79.18 billion. If these intangible assets were to be excluded, the company's price to book ratio would be significantly higher. The company's price to book ratio is higher than that of all three comparable companies, which are trading between 1.05 and 2.20 times book value. The market capitalization of this company is $302.36 billion . Management, directors, and other insiders own less than 2% of the outstanding stock. The capitalization of the floating stock (i.e., that which is not closely held) is $305.83 billion . During the 12 months ending 3/31/04, General Electric paid dividends totalling $0.78 per share. Since the stock is currently trading at $30.00, this implies a dividend yield of 2.6%. During the quarter ended 3/31/04, the company paid dividends of $0.20 per share. General Electric has increased its dividend during each of the past 5 calendar years (in 1998, the dividends were $0.42 per share). During the same 12 month period ended 3/31/04, the Company reported earnings of $1.55 per share. Thus, the company paid 50.3% of its profits as dividends. General Electric reports profits by product line. During 2003, the itemized operating profits at all divisions were $16.53 billion, which is equal to 12.4% o...