Bloomberg News reports that General Electric Co. (NYSE: GE) has cut the number of its business units from six to four. This change in organization structure should trim its overhead. But it could make it more difficult for investors to compare GE's performance before the reorganization to how it's doing after the change in structure.

The key unresolved question is whether the new structure will boost GE's revenue and profit growth. Bloomberg reports that the four new units will be GE Technology Infrastructure, GE Energy Infrastructure, GE Capital and NBC Universal. GE formerly had six units -- Reuters reports that GE Health Care, which was one of the six former divisions, now falls under the new Technology Infrastructure unit. GE's $13 billion consumer and industrial businesses, which include washing machines and lighting, is not part of the new structure -- in 2009 GE wants to spin those businesses off to shareholders.

Bloomberg reports that in May, GE CEO Jeff Immelt said that he intends to change GE's product mix to about 60% non-financial by 2010 -- far more than it is today. In 2007, GE's finance-related businesses accounted for 44% of net income and 53% of profit from continuing operations. It is not clear whether the new organization structure will help revive GE's revenue and profit growth.

As a Disney (NYSE: DIS) shareholder, the High School Musical juggernaut is important to me. It means money for the company. It means a point of distinction for Disney that adds value to its content and differentiates it from other media businesses such as News Corp. (NYSE: NWS) and Time Warner (NYSE: TWX). It means that tweens have something realistic to relate to that reflects their own days of breaking out in song while walking through school (okay, that was a joke).

But I was disappointed to hear that a reality show extension of the brand is having a tough time in the ratings. According to this blog post at The Hollywood Reporter, the show, called High School Musical: Get in the Picture, had the worst ratings on Monday night. It's some sort of competition show with a prize related to being in some sort of video in the Musical franchise.

I'm not sure of the specifics, but my main concern is that it couldn't offer any competition to CBS (NYSE: CBS) or General Electric's (NYSE: GE) NBC. Remember, Disney's big model is to take its content and spread it around to enhance the value of the company's other platforms. It's all about the synergy. Unfortunately, it didn't work this time. I honestly thought that ABC would have seen huge numbers from the kids on this one. It makes me wonder if Musical might be getting long in the tooth.

Bloomberg News reports that General Electric Co. (NYSE: GE) has cut a deal with Mubadala Development Co., a fund owned by the government of Abu Dhabi, which will yield $8 billion in capital to invest in financial services assets in the Middle East. Mubadala also plans to become one of the 10 biggest investors in GE stock through open market purchases. Depending on which assets they buy, this could be good news for long-suffering GE shareholders.

Bloomberg reports that GE and Mubadala will each contribute "$4 billion in equity over three years to the fund, aiming to reach $40 billion in assets." But today's partnership is more modest. Bloomberg reports that GE will also invest "$50 million in Masdar's Clean Tech fund, while Mubadala will invest $200 million in GE Industrial Investment Partners, a new program to provide development money to health-care, energy and transportation industries."

The benefit for shareholders will be longer term, if at all. That's because GE did not change its forecast for 2008 as a result of the announcement -- in April GE CEO Jeff Immelt predicted earnings may rise "zero to 5 percent, to $2.20 to $2.30 a share in 2008." At this point, it looks like GE's biggest earnings growth opportunity is in the oil rich regions of the world and those developing nations, like China and India, where that oil is being consumed.

Today's deal looks like it will increase GE's exposure to these opportunities.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns GE shares.

Time Warner (NYSE: TWX) bombed earlier in the summer with a movie called Speed Racer. If you said you didn't see that one, I wouldn't be surprised. However, in the interest of cosmic balance, the media company scored with its new Batman flick, The Dark Knight. And when I say scored, I mean it. The film is estimated to have taken in about $155 million over the past three-day weekend at domestic theaters, according to Boxofficemojo. If this estimate holds, then it represents record business. Spider-Man 3 currently holds the three-day record of $151.1 million.

Mamma Mia!, distributed by General Electric's (NYSE: GE) Universal didn't come close to the Bat. It came in second with around $27 million. Hancock from Sony (NYSE: SNE) was third with $14 million, and it will be crossing the $200 million mark in about a week or so. Time Warner's Journey to the Center of the Earth was fourth, while Universal's Hellboy II: The Golden Army was fifth. That film took a steep 70% drop compared to its debut-weekend performance. I didn't think it would fall that far, but I suppose the Batman juggernaut left it no choice but to step aside. It took in a weak $10 million for the weekend.

There will be five superheroes competing for the attention of weekend moviegoers come Friday. There's Marvel Entertainment Inc. (NYSE: MVL)'s duo Iron Man and The Incredible Hulk, Sony Corporation (NYSE: SNE)'s Hancock, General Electric Corporation (NYSE: GE)'s Hellboy (distributed by GE's Universal), and Time Warner, Inc (NYSE: TWX)'s Dark Knight. So, who's going to be the ultimate crime fighter?

I'll tell you which one prevails: Time Warner and its new Batman film, The Dark Knight, has the weekend all locked up. This is set in stone. The Hulk and Iron Man are pretty much done, Hellboy isn't a powerful enough brand name, and Hancock didn't deliver the big numbers I thought it was capable of during its debut weekend (since then, however, the movie has held up well, I have to admit). But you can bet that Dark Knight hits $100 million this weekend. Can you feel the buzz surrounding this blockbuster in the wings? I can. Several reviews I've read were full of cinematic worship for this new entry in the franchise, with special praise reserved for the late Heath Ledger and his portrayal of the fiendish nightmare known as The Joker. There's a decent marketing campaign behind the project, including promotion of the availability of IMAX (NASDAQ: IMAX) screenings. If there ever seemed a movie fit for Imax, this is it. Yeah, Dark Knight can't lose, it can only win big.

Of course, what about Time Warner's stock? It could certainly use a superhero right now, as it has been hovering in recent times not above Gotham City (although that would probably be treacherous enough) but above 52-week-low City. I can't say that a big opening weekend definitely won't move the stock a little just due to the excitement factor, but I wouldn't buy the company ahead of the film (I also wouldn't gamble with IMAX either). Time Warner simply is too large to be affected significantly by one movie. If you consider Time Warner at all, it would be for fundamentals and valuation (I think the company is cheap here, although with this market, I'd rather get it cheaper). Enjoy the movie first, think about the stock later...

Disclosure: I own GE and Marvel; positions can change at any time.

Microsoft (NASDAQ: MSFT), a competitor of IBM (NYSE: IBM) and Google (NASDAQ: GOOG), will report its earnings for the fourth quarter on Thursday. According to Trey Thoelcke's earnings summary, the software giant will be expected to produce sales of about $15 billion on earnings per share of 47 cents. These numbers would represent double-digit growth rates for each metric.

According to this estimates page at AOL Finance, Microsoft has cultivated a reputation for being reliable when it comes to delivering on Wall Street expectations. It certainly has the assets to keep this trend going. The company's operating-system monopoly, as well as its incredible success with the Office suite of products, guarantees a steady stream of cash flow and bottom-line predictability. Other investments, such as the Xbox 360 and the company's various Internet properties, aren't as guaranteed. In fact, Microsoft has engaged a very strange battle (strange to me and others, at least) to buy Yahoo! (NASDAQ: YHOO) to bolster its future prospects on the 'net.

So, here's what investors should be looking for. I will be very interested in what management has to say about its thoughts regarding Yahoo! and its utility for Microsoft. Is it an absolute necessity? I doubt it, and I really do hope that shareholders will finally get some closure on this subject. The best thing would be for Microsoft to announce that it is done with the portal. And in terms of the Xbox 360, I would be interested in hearing any new marketing strategies being readied for the holiday season and if the current recessionary environment will have any effect on sales. Microsoft recently reduced the price for one Xbox 360 model as a way of increasing that system's value proposition in relation to the Sony (NYSE: SNE) PlayStation 3 and the Nintendo (OTC: NTDOY) Wii. The company also has entered partnerships with General Electric's (NYSE: GE) NBC Universal and Netflix (NASDAQ: NFLX), according to Variety, to make its Xbox Live asset even more attractive to users looking for cool content such as movies and TV shows.

General Electric (NYSE: GE) didn't see a huge reaction to its earnings on Friday. I think the stock closed up by only a couple pennies. But at least its NBC Universal asset scored a hit with Hellboy II: The Golden Army. According to Boxofficemojo, it topped this weekend's domestic box office with a gross of more than $35 million. Sony's (NYSE: SNE) Hancock, however, is close. That film was in second place with a haul of $33 million. By the time final figures are out, Hancock could find itself in first place, but I doubt that's going to happen. This really seemed to be Hellboy's weekend. I have to say, though, that Hancock did much better than I thought it would for its second weekend at bat. The film will easily pull in over $200 million, maybe $250 million, before all is said and done.

Time Warner's (NYSE: TWX) Journey to the Center of the Earth 3D was number three with over $20 million. Not a particularly great debut, I don't expect too much action in the coming weeks from this one. Now, Wall-E is an important project for Disney (NYSE: DIS) shareholders since it is another effort from Pixar. Investors are still trying to figure out if the price paid for Pixar will be ultimately worth it. Wall-E is doing pretty well; it came in fourth over the weekend, and its total box-office take so far is about $162 million. Incidentally, Eddie Murphy failed horribly with his film Meet Dave. The movie, from News Corp. (NYSE: NWS), came in seventh with a little over $5 million. I didn't even know it was in the marketplace.

GE and Universal scored again at the multiplex with Wanted, which came in fifth. Its cumulative gross is now more $110 million. See that? GE can leverage quality content to bring in the revenues. If NBC Universal can synergize better with hits like these, then perhaps there won't be such pressure in terms of dumping the asset. For now, though, NBC Universal is a show-me division, and it better keep the hits coming to placate the board.

Disclosure: I own Disney and GE; positions can change at any time.

General Electric Company (NYSE: GE)
Q2 2008 Earnings Conference Call
July 11, 2008 8:30 AM ET

Management Summary

Operator

Welcome to the General Electric Q2 2008 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference, Dan Janki, VP of Investor Communications.

Dan Janki, Vice President, Investor Communications

Thank you. First of all, I would like to welcome everyone. Joanne and I are pleased to host today's conference call. The press release went out this morning at 6:30 AM with our financial information; that, along with today's presentation and supplemental financials, is available at our investor website at www.ge.com/investor. You can follow along via the webcast or you download and print the information. Today's presentation does contain forward-looking statements based on the world and economic environment as we see it today, and it is subject to change.

We will be going through today in the presentation an update on second quarter operations and financial results and our outlook on third quarter. To do that we have our Chairman and CEO, Jeff Immelt; and our Vice Chairman and CFO, Keith Sherin.

As a General Electric Company (NYSE: GE) shareholder, I am not happy with the loss of 32% of my capital under the current CEO. The previous two CEOs -- Reg Jones and Jack Welch -- have changed GE under their reigns. Thanks to the fall of Communism, many countries -- such as China, Russia, India and others -- are investing over $1 trillion in their efforts to bring their people into the 21st century, according to the Courier-Journal. Thanks to its Infrastructure unit -- which provides jet engines, power plants, locomotives and other products -- GE is well positioned to take a big share of that opportunity.

Today's GE earnings report confirms that. The infrastructure unit boosted its revenues 26% to $17.5 billion in the second quarter of 2008 and its segment profit climbed 24% to $3.2 billion. Unfortunately, that outstanding performance was masked by all the other flotsam in GE's portfolio. Now, according to Reuters, GE stock -- which had been up 2% in premarket trading after meeting its 54 cents a share outlook for Q2 earnings from continuing operations -- is down 1.3% due to a forecast of flat to down third-quarter profits at GE's finance units and an uncertain outlook for capital markets.

On the heels of the move by General Electric (NYSE: GE) Thursday to spin-off its consumer and industrial division, today we have news that Citigroup (NYSE: C) is selling its German retail banking business for $7.7 billion.

According to MarketWatch: "Citigroup said Friday that it's going to sell its German retail banking business to France's Credit Mutuel for 4.9 billion euros ($7.7 billion) in a deal that will strengthen its balance sheet and help it focus on faster-growing businesses."

This is a smart move for the company in order to clean up its balance sheet, but it's just a small step. If the company truly wanted to provide shareholder value, it could spin off the credit cards division, separate domestic and global consumer banking, spin off the capital markets division and so on. I admit that I haven't done all the work on this but my hunch is that if Citi would break up the company the combined parts would be valued significantly higher than where it is now trading.

While selling the division helps the balance sheet, unfortunately the impact for shareholders is muted. I would much rather see it follow the path of GE and give shareholders a share of this business and other businesses.

At least this sale is a start.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/11/08.

Unlike a number of large banks, GE (NYSE: GE) does not need any money. It does, however, need to look like it is doing something to address shareholder concerns that it is in too many unrelated businesses. Yesterday, it said it would consider spinning-off much of its industrial and consumer divisions. They are dogs, so why not give them to the shareholders.

Now, GE has decided to sell part of its financial services business. According to Reuters, "General Electric Co will sell its Japanese consumer finance operation to Shinsei Bank Ltd," The piece of GE's business in the Asian country will bring it $5.4 billion.

Shareholders will probably not reward GE for the move. They want something much bigger. While the company's infrastructure business is a huge success, other operations including its medical device and NBCU businesses are viewed as slow growing and a poor match for an company which has so many divisions that even management does not seem able to keep track of them.

Perhaps GE can hold a huge auction and rid itself of half of its businesses all at once Sotheby's could handle the sell-off in a day.

Douglas A. McIntyre is an editor at 247wallst.com.

General Electric Company (NYSE: GE) used to have a great advertising slogan: "GE: We Bring Good Things to Life." I don't know when GE dropped that slogan but since its stock has dropped 32% under its current CEO, I was wondering how it could bring new life to its stock.

When GE announced this morning that it would try to spin off its Industrial unit, I realized that GE would like to bring new life to its stock. And I was invited to GE's CNBC Power Lunch this afternoon to discuss this before my segment was canceled. If I had appeared, I would have discussed the benefits of focusing GE on businesses with high profit potential in which GE has a competitive advantage.

GE's best business in that regard is its booming Infrastructure Unit which had $58 billion in sales and $11 billion in profit -- up 23% and 22% respectively in 2007. Infrastructure sells power plants, aircraft engines, and locomotives to growing economies like the Middle East, China and India. Unfortunately, GE has many other business units which do not perform as well.

Marvel (NYSE: MVL) is all about making movie franchises these days. For instance, the success of Iron Man has led to plans for a sequel. Shareholders are, understandably, happy about this since a series of blockbuster films will rake in a lot of money for the company and have a positive effect on the shares.

But, Marvel's second movie out of the gate, The Incredible Hulk, may not get the sequel treatment, according to the Hollywood Reporter. The article implied that the financial performance of the film may not have been blockbuster enough to make a sequel inevitable. That doesn't mean that it won't eventually get one, but since there are, as of now, no plans for another Hulk, the speculation is out there. As aforementioned, we already know that there will be another Iron Man.

As a Marvel shareholder, I am disappointed by the box-office results for this latest iteration of the Hulk (even the first weekend seemed weak). Back in 2003, when that year's movie version of the character was released, there was widespread disdain for the project (I myself couldn't stand the flick). Then came this summer's so-called reboot of the franchise. Unfortunately, as of now, 2008 Hulk hasn't done much better than 2003 Hulk.

In a move that many investors have wanted, General Electric (NYSE: GE) just came out and said that it is mulling over the potential spin-off of its consumer and industrial division.

According to MarketWatch, "The conglomerate said shareholders will receive stakes in the new entity covering ts appliances, lighting and industrial units."

This is great news for investors and may be a precursor for other large conglomerates that have seen their stock prices stagnate for more than six years, to start spinning off divisions in order to unlock value for shareholders.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/10/08.

Stock options give investors a great tool to control risks or speculate on stocks. Call options give investors the right to buy the stock and are typically considered a bullish tool, while puts give investors the right to sell the stock and are typically considered a bearish bet on the future price movement of the stocks. I was interested in seeing what equities have the highest open interest or most outstanding options issued on them looking at all strikes and all months (excluding ETFs).

The top six stocks with most options issued are:

Citigroup (NYSE: C) has an open interest of 5,366,521 options, 2,751,255 are calls and 2,615,266 are puts. The stock has been trending down with the rest of the financials for the last year. Speculation now appears equal with about the same number of calls and puts traded.

Bank of America (NYSE: BAC) has an open interest of 5,204,313 options; 2,575,909 are calls and 2,628,404 are puts. Like Citigroup, this stock has seen its price cut in half over the last year.

General Electric (NYSE: GE) has an open interest of 3,877,635 options; 2,138,926 are calls and 1,738,709 are puts. With 23% more calls than puts outstanding, speculators look slightly bullish on GE.