The MSM is declaring that GE profits are up 18%. That is complete and utter bullshit. I’ve never come across a company that purposefully complicates, obscures, and misinforms about their true financial picture more than GE. I ignore the bullshit press release and go right to the numbers. Their press realease is a freaking 18 pages of gobledy gook. There entire purpose is to obscure and confuse. Here is a link to their release:
If you dig into the back pages you find little nuggets not revealed at the top of the release:
- GAAP earnings from continuing operations (attributable to GE) were $3.2 billion, up 4%, or $0.22 per share, down 21% from the prior year quarter.
- Third-quarter revenues were $35.4 billion for the quarter were flat compared to revenues of $35.4 billion from the prior year’s quarter. Industrial sales of $23.2 billion decreased 2% compared to 2010. GE Capital Services (GECS) revenues of $12.0 billion were up 1% from the third quarter of 2010.
- Cash generated from GE Industrial operating activities for the first nine months of 2011 totaled $6.5 billion, down 35% from $10.1 billion for the comparable period of 2010.
It seems their actual GAAP earnings, which is what the world uses, were DOWN 21% from the prior year. Of course the MSM is reporting a 18% increase. Nice fraudulent announcement.
Their revenue is completely stagnant, but somehow they manage to announce profits. Amazing what creative accountants can do. It seems GE Capital was somehow able to increase their earnings by $1.7 billion over last year with flat revenue. AMAZING!!!!! It seems they created $600 million of income by reducing their loan loss reserve. As we enter part two of this Depression, they are reducing their reserve for future losses. Immelt is a fucking genius. If you remove the GE Capital fraudulent profit, then the GE’s profits are actually plunging.
There is one thing you can’t fake – CASH FLOW. In their 18 page release they do not supply a basic Cash Flow Statement. But the little blurb above says it all. Their Industrial division has generated $3.6 BILLION less than it did through the first nine months of last year. That is a disasterous result. GE is a ticking timebomb.
My favorite part of their release is the good old balance sheet. This is where they hide the toxic assets. Their balance sheet is a disaster. They have $285 BILLION of loans receivable from consumers and commercial businesses. They are losing hundreds of millions in their real estate division. Consumers are rolling over and the losses will accelerate in this division. They have $466 BILLION of debt and only $125 BILLION of equity. Their balance sheet is toxic. When the next crisis hits, this company could go belly up just like they almost did in 2008. They have fixed nothing. Their stock price is lower than it was in 2008/2009.
Don’t believe the CNBC happy talk about GE. It is complete and utter bullshit.