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:
http://finance.yahoo.com/news/GE-Delivers-031-Operating-EPS-bw-664489554.html?x=0&.v=1
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.
Administrator says:
By Christopher Hinton, MarketWatch
WASHINGTON (MarketWatch) — General Electric Co. said Friday growth in the company’s industrial orders slowed in the third quarter from the previous period, reflecting a more difficult business environment as the global economy shows signs of weakening.
“The industrial order growth wasn’t bad, but it failed to clear the bar,” said William Blair & Co. analyst Nicholas Heymann, who expected industrial order growth to pick up in the third quarter and top 30%.
Instead, GE /quotes/zigman/227468/quotes/nls/ge GE -1.13% said orders growth decelerated to a 16% pace from a year ago, versus a 24% year-over-year jump seen in the second quarter. Organic growth fell to 6% from 17%.
“We have seen a slowdown in orders, but it has been very manageable,” said Chief Financial Officer Keith Sherin, on a conference call with analysts.
GE’s third-quarter earnings were the first since 2008 that didn’t beat the Wall Street consensus, according to FactSet Research, and its in-line results helped push shares of the the Dow Jones Industrial Average /quotes/zigman/627449/delayed DJIA +1.15% component lower shortly after the bell on Wall Street.
In the past three months, the stock is down about 13% as investors worry about the European sovereign-debt crisis and decelerating global growth.
The Fairfield, Conn.-based conglomerate builds power generators, jet engines, oil and gas equipment, and transportation products. It also offers commercial loans and leases, credit cards and other financial services.
For the September quarter, GE said adjusted earnings would have risen to 31 cents a share from 28 cents in the year-ago period, with revenue virtually flat at $35.37 billion. Analysts had expected a profit of 31 cents a share, on average, with revenue of $34.84 billion.
GE’s industrial segments saw double-digit revenue growth both domestically and internationally in the period, with international revenues up 25%, driven by strong double-digit growth in Brazil, Russia, China, India, Canada, Mexico and the Middle East.
Economic growth was expected to cool before year’s end and then pick up again in 2012. Globally, the International Monetary Fund anticipates 2011 GDP growth of 2.96%, down 4.05% last year.
For 2012, the group predicts GDP growth of 3.16%.
Corporations continue to talk of growth, but consumers have been pulling back on spending.
In GE’s Home & Business Solutions segment, which produces refrigerators, freezers and clothes washers, quarterly earnings declined 63% from a year ago on a 1% drop in revenue, hurt by fewer high-end sales and a sharp rise in material costs.
In the second quarter, the segment’s earnings dropped 26%.
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21st October 2011 at 9:40 am
Opinionated Blovaitor says:
No cash flow statement? That makes it a short or “sell everything, quickly”.
Has the “aged receivables” started to blow out? If it has, then GE is not long for the world. Cashflow strangulation is deadly for finance companies.
As for GE itself, it’s a hedge fund that happens to make things. When you realise that all the complexity and mark to unicorn accounting makes sense.
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21st October 2011 at 10:14 am
TeresaE says:
Thank you for this. We caught the hyping this morning and he had noted GE in his little book he writes down all his brilliant investing strategies in. And to be fair, he is “up” now. I can’t seem to convince/adequately explain, how the coming dollar inflation will render moot his “profits,” if lucky. If not lucky, he’ll just lose it all.
Anyway, thank you.
But the MSM’s take on it shouldn’t be a great surprise. The “economists,” “analysts” and talking heads have been playing the beating lowered expectation game for a long time.
With rare exceptions, pretty much everything they tell us is bullshit.
Pure and utter bullshit.
Those still believing it will eventually be handed their asses, just like the last time(s) it has happened. How quickly the Boob Tube makes us forget their proven lies. That is what amazes me.
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21st October 2011 at 10:21 am
Smokey says:
Blovaitor,
It’s spelled B-L-O-V-I-A-T-O-R
BLOVIATOR Goddammit–Bloviator-Bloviator-Bloviator-Bloviator-Goddamit
B-L-O-V-I-A-T-O-R
Bloviator Goddamit
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21st October 2011 at 10:37 am
Administrator says:
Headline on Marketwatch:
General Electric profit rises 57%, revenue flat
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21st October 2011 at 11:06 am
Thinker says:
On the bright side, Smokey, he got Opinionated correct…
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21st October 2011 at 11:32 am
Welshman says:
Admin.,
For christ sake stop popping everyones profit annoucements, you are going to get us into a depression with such talk. I’m sure you know what symbol is in the left hand corner of each CNBS employee’s pay check don’t you.
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21st October 2011 at 12:18 pm
Opinionated Bloviator says:
Crap, not again, it must be RF interference from my tinfoil hat.
If it happens a third time I will have to change my nom de plume to BOB. I should be able to spell that consistantly, I hope…
Welshman – Spreading depression is my job, along with spelling errors that cause Smokey’s head to explode…
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21st October 2011 at 2:41 am