NBC Universal, which recently was the subject of a proposed transaction between General Electric (GE) and Comcast (CMCSA), is having a serious problem with The Jay Leno Show. It's not performing well in the ratings. But wait, there's more, as a typical infomercial narrator might intone: The Tonight Show isn't faring any better under the aegis of Conan O'Brien.

Worse, the issues with the 10 PM Leno programming asset go beyond just his ratings. The show is exerting a negative halo effect over the local newscasts. If you don't have a strong lead-in, then the content that follows will suffer.

Continue reading The Leno/O'Brien Puzzle: What Should NBC Do?

The Leno/O'Brien Puzzle: What Should NBC Do? originally appeared on BloggingStocks on Fri, 08 Jan 2010 15:30:00 EST. Please see our terms for use of feeds.

Many retail investors have been shrieking as General Electric (GE) hovers around ten year lows and has gone nowhere all year while almost everything else has appreciated. GE is on hot lists and not lists for 2010.

It is one of my holdover picks from 2009 and if it does not improve in the next few days will be my only loser -- for the other, a winner, see: Chasing Value: 2010 -- #3 EZCORP.

Continue reading Chasing Value: 2010 -- #6 General Electric

Chasing Value: 2010 -- #6 General Electric originally appeared on BloggingStocks on Wed, 30 Dec 2009 15:30:00 EST. Please see our terms for use of feeds.

Continue reading Chasing Value: Blaming GE's Immelt for what?

Chasing Value: Blaming GE's Immelt for what? originally appeared on BloggingStocks on Wed, 02 Sep 2009 15:40:00 EST. Please see our terms for use of feeds.

Recently, Zac Bissonnette took Amazon (NASDAQ: AMZN) and its press-release wizards to task for essentially issuing a document that was full of spin but low on substance. This was in regard to Amazon having its "best Christmas ever." I'm sure you've heard about it. Well, I was looking at an article yesterday that talked about some box-office numbers from General Electric's (NYSE: GE) Universal Pictures asset. I kind of got the same feeling about the numbers as Zac did about the Amazon Christmas thing.

Of course, keep in mind, the article I was looking at was not a press release. Still, the execs at NBC Universal are surely pretty proud about the numbers. After all, they are supposed to be best-ever stats. On the domestic side of things, Universal achieved a total box-office gross of approximately $1.1 billion.

On the international front, the studio brought in $1.7 billion. The year-over-year growth rate was flat for domestic theaters, and for international theaters, the company saw a robust 66% increase. Personally, I'm not impressed. To begin with, domestic was flat, and that's not good. And as for international, well, there was no context in terms of the effects of currency rates.

Plus, does it really matter if a studio is achieving high grosses? There's never any comment about profits and losses on specific titles, compensation structures for the stars, etc. To me, this data doesn't say a lot (admittedly, I'll never be satisfied with the amount of disclosure that studios are required to give on their movie projects).

The article mentions two films as drivers for the year that, in my opinion, underperformed in the domestic marketplace: The Incredible Hulk, based on the Marvel (NYSE: MVL) character, and the latest sequel in the Mummy franchise. The latter barely made it over the $100 million mark, and the former only grossed a little better than $130 million. Big deal. You would have figured that Universal could have squeezed some more box-office bucks out of these properties.

Many on Wall Street believe that GE should rid itself of NBC Universal. I'm not one of them, but I concede that Universal Pictures needs to do better. Seriously, Universal Pictures did okay, but not great, in '08. I sincerely hope that CEO Jeffrey Immelt does not allow the studio to rest on these laurels. That would be a shame, and a slap in the face to shareholders.

Disclosure: I own GE; positions can change without notice.

Universal Pictures had a great year -- does it matter? originally appeared on BloggingStocks on Fri, 02 Jan 2009 13:30:00 EST. Please see our terms for use of feeds.

GE matches reduced expectation and people cheer originally appeared on BloggingStocks on Fri, 10 Oct 2008 10:55:00 EST. Please see our terms for use of feeds.

• Appliances
• Aviation
• Consumer Electronics
• Electrical Distribution
• Energy
• Finance - Business
• Finance - Consumer
• Health-care
• Lighting
• Media & Entertainment
• Oil & Gas
• Rail
• Security
• Water

Continue reading Serious Money: GE should focus on water and power

Serious Money: GE should focus on water and power originally appeared on BloggingStocks on Thu, 12 Jun 2008 15:40:00 EST. Please see our terms for use of feeds.

USA Today reports that oil billionaire T. Boone Pickens is placing a $2 billion bet on wind power. Pickens' Mesa Power plans to build the Pampa Wind Project in the Texas Panhandle. It will eventually cover 400,000 acres and generate enough power for more than 1.3 million homes -- making it the largest wind farm in the world.

And Pickens is helping General Electric Company (NYSE: GE) in the bargain. That's because he's buying GE turbine technology. GE is expected to deliver 667, 1.5-megawatt wind turbines in 2010 and 2011. Jeffrey Immelt, GE Chairman and CEO said, "As America's demand for energy escalates, it is clear that wind can and will play a bigger part in meeting that need. We're excited to partner with an energy visionary like T. Boone Pickens to bring our wind technology to the marketplace."

With oil hitting $127 a barrel, I hope this project is the first of many. It will take many different sources of alternative energy to reduce U.S. demand for black gold. Wind power is certainly a good alternative. And if Pickens and GE get richer in the process, that's fine by me.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He owns GE shares.

T. Boone Pickens wagers $2 billion on wind power originally appeared on BloggingStocks on Fri, 16 May 2008 16:49:00 EST. Please see our terms for use of feeds.

AP reports that General Electric Company (NYSE: GE) CEO Jeff Immelt did quite a bit of whining at today's shareholder meeting in Erie, PA. But he did announce one piece of news that might help GE's stock: GE will increase its planned cost cutting from $2 billion to $3 billion. Yet I think he's still smarting from Jack Welch's threat to shoot Immelt on GE's CNBC last week.

Immelt whined on two fronts: the tough economy and how his buying and selling of GE business units is not appreciated. Here's what he said about the economy: "We are in the toughest economy since 2001 and the worst housing crisis since the Depression. Banks have written off more than $250 billion. . . . Days of easy credit have turned into months of no credit at all. While I am confident about the economy long term, we could see even more difficult times ahead."

And on the matter of GE's portfolio, Immelt exuded self-pity as he assailed his audience: "I would ask people to keep something in mind. In the last five or six years I've sold 50 or $60 billion of business. I've acquired 70 or $80 billion of business. This has probably been the most active portfolio change in the history of the company and it would be hard to find another industrial company that's done anything close to what we've done."

Continue reading GE's Immelt reduced to whining after homicidal rant from Jack Welch

GE's Immelt reduced to whining after homicidal rant from Jack Welch originally appeared on BloggingStocks on Wed, 23 Apr 2008 13:04:00 EST. Please see our terms for use of feeds.

Continue reading General Electric's Jeff Immelt isn't changing a thing

General Electric's Jeff Immelt isn't changing a thing originally appeared on BloggingStocks on Tue, 22 Apr 2008 16:53:00 EST. Please see our terms for use of feeds.

James Hardesty of Hardesty Capital Management, which owns shares in GE, was quoted on Bloomberg TV as saying, "Immelt now has to be put in the penalty box."

Peter Sorrentino, a senior portfolio manager at Huntington Asset Advisors in Cincinnati, which owns more than six million GE shares, argues that analysts and the GE board need to look at Immelt's plans very carefully."The time has come for greater scrutiny of Immelt," said Sorrentino on Bloomberg Radio. "It's really incumbent on the board to ask tougher questions now. The board needs to ask, 'Are we really headed in the right direction? Yes, the Infrastructure business is going very well; let's make sure that we're not blowing it on the other side'."

GE's Immelt 'in the penalty box'? originally appeared on BloggingStocks on Tue, 15 Apr 2008 13:50:00 EST. Please see our terms for use of feeds.

CNNMoney reports that General Electric Company (NYSE: GE) missed earnings expectations by a mile. Its net income fell 12% to $4.4 billion, or 44 cents per share, seven cents less than what Thomson Financial's polling of analysts had estimated.

In February I analyzed GE's breakup value and concluded that the stock was probably a bit overvalued. The big problem with today's earnings announcement was GE's financial services unit. Like Wall Street banks, GE suffered from "extraordinary disruption in the capital markets in March [which] affected our ability to complete asset sales and resulted in higher mark-to-market losses and impairments."

But that's not all. GE missed on revenues and lowered its guidance. Sales rose 8% to $42.2 billion, $1.5 billion below analysts' forecast of $43.7 billion. GE lowered its full year guidance to between $2.20 and $2.30 per share, reflecting flat to 5% growth. GE is down 11% in pre-market.

Since its current CEO, Jeff Immelt took over in September 2001, GE stock has fallen 20% from $41 to $33. Remind me again of why the "great" Jack Welch chose Immelt to succeed him.

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.

GE brings bad things to Wall Street originally appeared on BloggingStocks on Fri, 11 Apr 2008 09:00:00 EST. Please see our terms for use of feeds.

The New York Times reports that General Electric Co. (NYSE: GE) sponsored a webcast yesterday with its CEO, Jeff Immelt, to answer questions submitted by the general public. Immelt denied that its NBC Universal unit was for sale while answering questions from Carl Quintanilla and a co-host of the Squawk Box program on CNBC, and Chrystia Freedland, the United States managing editor of The Financial Times.

A few disclosures are in order: GE invited me to participate in this webcast but I had a prior commitment. I met last July with GE's CFO -- where he said that NBC Universal was worth between $40 billion and $45 billion. I've appeared on CNBC with Quintanilla, most recently as guest host of Squawk Box. And I own GE stock and am not a happy camper since it's trading 13% below where it was on September 10, 2001 when Immelt took over. The S&P 500 has risen 21% since then.

Is Immelt right that GE is undervalued? I took a look at that question and concluded that it was slightly overvalued on February 27th. Specifically, I calculated a range of breakup values for GE which were between 11.1% and 1.5% less below GE's current market capitalization. I could be wrong about that analysis since I was compounding assumptions on assumptions and had no guidance on the analysis from GE.

Continue reading GE needs new message, not new medium

GE needs new message, not new medium originally appeared on BloggingStocks on Fri, 14 Mar 2008 09:43:00 EST. Please see our terms for use of feeds.

Several media outlets have reported that GE's (NYSE: GE) CEO Jeff Immelt used a webcast to try to reach the company's two million smaller shareholders. The project included Immelt being questioned by Carl Quintanilla of CNBC, and Chrystia Freedland of The Financial Times.

The webcast drew 6,000 questions over the internet, but Immelt could only answer a tiny fraction of those. According to The New York Times, Mr. Immelt had one message: "We ought to be trading at a premium to the S.& P."

GE is missing the boat. Whether it is through webcasts or meetings with large investors, Wall Street does not believe in the conglomerate's strategy. At this point, the growth at GE comes from its infrastructure and financial operations. Divisions like NBC Universal, the company's medical group, and its industrial operations are a drag on the company's overall results.

GE trades near a 52-week low. PR won't solve that problem. The company needs to restructure and dump the dogs.

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

A GE webcast won't help shares originally appeared on BloggingStocks on Fri, 14 Mar 2008 09:00:00 EST. Please see our terms for use of feeds.

In GE's (NYSE: GE) annual report, CEO Jeff Immelt plans to state, once again, that the conglomerate will not sell NBC Universal, the company's entertainment arm. There have been rumors of a sale for the last two years.

"Should we sell NBCU? The answer is no!" Mr. Immelt writes in a message for investors in G.E.'s 2007 annual report, according to The New York Times.

The statement is likely to disappoint GE investors. According to the company's 10-K, NBC Universal revenue dropped last year to $15.4 billion from $16.2 billion the year before. Operating profit moved up about 7% to $3.1 billion. These results trailed the performance of GE's large infrastructure and finance businesses.

GE now trades near its 52-week low. With its balance sheet and international prospects, the stock should be doing much better. But the company has to auction off its under-performers if the shares are going to gain ground.

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

GE denies NBC sale, again originally appeared on BloggingStocks on Tue, 11 Mar 2008 08:00:00 EST. Please see our terms for use of feeds.

General Electric (NYSE: GE) CEO Jeffrey Immelt will host GE's annual performance review and business outlook meeting on December 11. GE overall option implied volatility of 26 is above its 26-week average of 24 according to Track Data, suggesting larger risk.

Boeing (NYSE: BA) will give a mid-quarter update on the 787 Dreamliner program on December 11th. Jeffries says, "We feel comfortable with our $122 price target." BA overall option implied volatility of 28 is near its 26-week average of 27 according to Track Data, suggesting non-directional risk.

Daily Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Option update 12-10-07: GE volatility higher ahead of annual outlook originally appeared on BloggingStocks on Mon, 10 Dec 2007 09:50:00 EST. Please see our terms for use of feeds.

Revenue will be $175 billion this year, with a profit of $23 billion, according to a Dow Jones report. That's better than the $171.6 billion average consensus estimate expected by analysts surveyed by Thomson Financial. Chief Executive Jeffrey Immelt crowed on his company's CNBC network that "global growth is really substantial now." Like other CEOs, Immelt sees the housing market as "tough," which may hurt some GE businesses such as appliances.

Immelt dismissed talk on Wall Street calling for the conglomerate to dump its NBC Universal media and entertainment business, pointing to its improving performance. "I am all about running NBC Universal for the long-term," he said.

Continue reading GE's Immelt sees strong 2007, dismisses NBC sale talk

GE's Immelt sees strong 2007, dismisses NBC sale talk originally appeared on BloggingStocks on Wed, 14 Nov 2007 10:48:00 EST. Please see our terms for use of feeds.

NBC Universal Chief Executive Jeff Zucker made it clear at a conference yesterday that GE (NYSE: GE) had no interest in selling the media business. Referring to GE CEO Jeff Immelt, Zucker said, "He has said numerous times that NBCU is not for sale. It is not for sale after the Olympics." Some press reports have indicated that GE would take the big money from the sports event and then dump the business on some sucker.

It is odd that the head of a GE division should have to make this kind of comment at all. The head of the locomotive division probably wouldn't make comments about the future of his business. Meanwhile, NBC Universal can go on operating as usual whether Wall Street thinks it is for sale or not.

The argument for selling NBC is that the unit does not fit with the conglomerate's industrial and financial operations. That is true, but owning a network does mean tickets to the Super Bowl and the Oscars.

NBC is a $15 billion business with operating income running about $2.5 billion, making it a modest part of GE's overall earnings. Still, the business is about the size of CBS (NYSE: CBS), which has a market cap of $21 billion and debt of $7 billion.

For the $28 billion enterprise value of CBS, GE would sell NBC tomorrow.

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

NBC is probably not for sale originally appeared on BloggingStocks on Tue, 30 Oct 2007 10:48:00 EST. Please see our terms for use of feeds.

The plan makes sense, at least on paper. GE (NYSE: GE) believes that it can offset any slowdown in its US business by the acceleration of revenue in China and India. It is, perhaps, one of the benefits of being a multinational.

The FT writes that, "GE's chairman and chief executive (Jeffrey Immelt) said the company's sales in emerging markets such as China and India were expanding at 20 percent a year, and there were few signs of this growth slowing."

But, GE's view is based on two assumptions that may not be true. The first is that a slowdown in the US will not spread to Asia and the Indian subcontinent. Much of the export income from China and India depends on demand in the US and Europe. if that demand slackens, there is no guarantee that their own economies will be able to continue growing rapidly.

GE is also assuming that growth in these countries, particularly China, will not come without a cost. Trade tensions between the US and the world's most populous country still exist. The China toy debacle demonstrates that. It would not take so terribly much for China to shut its markets to certain US goods and services, if it feels that it has been provoked.

GE's plan to keep growing outside the US looks good, for now.

Douglas A. McIntyre is an editor at 247wall st.com.

GE looks to China and India to balance US slowdown originally appeared on BloggingStocks on Mon, 29 Oct 2007 09:30:00 EST. Please see our terms for use of feeds.

General Electric Company's (NYSE: GE) Industrial segment is worth between $20.2 billion and $21.7 billion, according to my estimates.

GE Industrial, which constituted 20.5%, 22.1% and 22.9% of GE's revenues in 2006, 2005 and 2004, respectively produces and sells products including consumer appliances, industrial equipment and plastics, and related services. It also provides asset management services for the transportation industry.

GE Industrial strikes me as a hodgepodge of businesses that should either be fixed or sold. In the second quarter, this segment's revenues declined while its profits increased slightly. I was intrigued that Keith Sherin said that its appliances unit generated a return on total capital of 70%. On the other hand I wonder about how many of the other units within this segment earn such high returns.

Assuming that GE Industrial generates net income of $1.3 billion in 2007, here are the range of valuations based on the Price/Earnings ratios of the following peer companies:

• Whirlpool Corp. (NYSE: WHR) P/E: 15.2. $20.2 billion
• Electrolux AB (ADR) (OTC: ELUXY) P/E: 16.3. $21.7 billion

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He owns General Electric shares and has no financial interest in the other securities mentioned in this post.

Breaking down GE's Industrial business: A BloggingStocks series originally appeared on BloggingStocks on Mon, 30 Jul 2007 12:56:00 EST. Please see our terms for use of feeds.

After my meeting with General Electric Co. (NYSE: GE) CFO Keith Sherin last week, I tried to figure out how much GE's NBC Universal might be worth in the open market. Such analysis is relevant now for two reasons:

• GE's stock price has fallen 2% under its current CEO. When Jeff Immelt took over as CEO on September 7, 2001, GE was trading, 2%, or 87 cents, above today's $38.79. During that same period, the S&P 500 rose 40%. In predecessor Jack Welch's first 5.9 years as CEO, GE's stock rose 221% from a split-adjusted $1.40 in April 1981 to $4.50 in March 1987.
• A respected analyst recently advocated a breakup to get GE stock moving. The New York Times [registration required] recently reported that Citigroup Inc.'s (NYSE: C) John Sprague issued a report titled "Partial Break-Up Could Break Deadlock on the Stock."

Is GE worth more broken up in pieces and sold or kept intact? To answer this, let me explain how a conglomerate like GE can raise its stock price. My theory is that GE management has two levers: the P/Es of the industries in which GE competes and the earnings growth rates of its businesses in those industries. To increase GE's market value, its management should prune GE's portfolio of businesses with the lowest P/Es and slow earnings growth -- replacing them with high P/E, fast earnings growth businesses which it can run successfully (if that can be done without overpaying). Nevertheless, as noted here, I am not sure whether a conglomerate is a good corporate strategy for GE because it may be leading the stock market to discount its earnings by 4%.

I address whether breaking up GE will increase its stock price in Breaking Down GE, a seven-post series.

Continue reading Why breaking up GE isn't worth the bother: A BloggingStocks seven-part series

Why breaking up GE isn't worth the bother: A BloggingStocks seven-part series originally appeared on BloggingStocks on Mon, 30 Jul 2007 09:45:00 EST. Please see our terms for use of feeds.