CNNMoney reports that General Electric Co. (NYSE: GE) is selling its appliance business. Goldman Sachs Group (NYSE: GS) is running the auction for this maker of refrigerators, microwaves and dishwashers and expects to receive between $5 billion and $8 billion for this $7 billion division of GE's $17.7 billion (2007 revenues) Industrial business unit.

I have been advocating that GE shed its ancillary businesses and this is one that makes sense to sell. I have taught several cases on the appliance industry and one of them highlights the many problems that GE's Appliance business suffered from in the 1990s thanks to the growing bargaining power of mass merchandisers, significant competition from Chinese manufacturers, and some internally inflicted wounds.

If GE Appliances was valued at the same Price/Sales ratio as Whirlpool (NYSE: WHR) -- 0.3 -- it would fetch $3.5 billion. The appliance industry average price/sales ratio is 0.7 -- which would yield GE $4.9 billion. So it looks like GE believes its appliance business is worth well more than the average appliance industry competitor. I applaud the idea of selling GE Appliances but the real gem of GE is its infrastructure business which is capitalizing on the growth of developing countries like China and India.

General Electric Co. (NYSE: GE) today gave a bullish outlook for 2007 helped by growth in energy, healthcare and infrastructure.

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.