Mother of all breakups

20 January 2006 By Rob Cox Follow @rob1cox

A complete breakup of the mother of all conglomerates wouldn’t make sense. GE trades at a premium to the sum of its parts. But GE should sell businesses like equipment leasing, consumer appliances, lighting and even media.

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General Electric on Friday reported a 46% decline in fourthquarter profits as it exited a lowergrowth insurance business. The US conglomerate earned $3.1bn, or 29 cents a share, down from $5.6bn, or 53 cents a share after accounting for a $2.7bn loss from the sale of GE Insurance Solutions and Genworth.

Excluding the impact of the disposals, however, GE's continuing operations boosted profit to $5.8bn, or 55 cents a share, from $5.7bn, or 54 cents a share. That was in line with analysts' expectations. Sales rose 3% to $40.7bn from $39.7bn.

GE forecast earnings between $1.94 and $2.02 a share for the current year, higher than it had previously told investors.

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