GE sees best profit outlook in a decade, execs say
SALT LAKE CITY
SALT LAKE CITY (Reuters) - General Electric Co sees its best earnings growth prospects in a decade as the global economic recovery drives demand for the heavy energy and aviation equipment it makes, top executives said.
Rising oil prices have not yet taken a toll on global growth rates, Chief Executive Jeff Immelt said at the company's shareholder meeting on Wednesday.
"Things are getting better every day. The global economy outside the U.S. is strong," he told reporters.
Asked about oil prices, which have risen about 33 percent over the past year on rising demand, particularly in emerging markets, Immelt said they have not yet taken a toll on growth.
"It's something to think about, but it doesn't seem to be hurting the economy," he said.
The U.S. economy is also improving, he added, although the housing sector remains a weak spot.
GE believes its profit growth over the next few years will be the best it has seen in a decade, officials said.
"This is the best earnings outlook we've had in the last 10 years," Chief Financial Officer Keith Sherin told a crowd of 268 shareholders.
GE no longer provides investors with numeric profit forecasts; but analysts on average look for earnings per share excluding one-time items to rise 16.5 percent this year, according to Thomson Reuters I/B/E/S.
GE, which employs about 134,000 people in the United States, each year holds its annual shareholder meeting in a different city where it has operations. Its energy, healthcare and finance arms all have a presence in Salt Lake City.
In a nod to the prevalence of firearms in the Western United States, the sign directing shareholders to the meeting's location in the city's Salt Palace convention center pointed out that no guns would be allowed in the meeting room.
NUCLEAR OUTLOOK UNCLEAR
The future of the nuclear power industry is unclear in the wake of the disaster at Japan's Fukushima power plant, where GE designed the turbines, Immelt said.
"It's too soon to say what the future of the nuclear business is going to be," he said. GE's nuclear operations are a joint venture with Japan's Hitachi Ltd.
The world's largest maker of jet engines and electric turbines has seen its stock price more than triple from its recessionary lows below $6, though the shares remain at about half their level before Immelt took the top job from Jack Welch a decade ago.
Immelt told shareholders that even through the recession and financial crisis, "in every year we earned more money than when the stock traded at an all-time high."
GE shares were up 2.7 percent to $20.64 on the New York Stock Exchange. Over the past year, the shares have risen 4 percent, lagging the 12 percent rise of the Dow Jones industrial average, of which it is a component.
Immelt faced shareholder questions on issues ranging from his appointment as an economic adviser to the Obama administration to GE's past support of efforts to attach a price to emissions of the greenhouse gas carbon dioxide.
No shareholders asked about the company's low tax rate -- which has been in the public eye over the past month -- though a group of several dozen protesters who said they were affiliated with the conservative Tea Party movement gathered outside to protest it.
Shareholders approved company-backed resolutions including the election of the board and a proposal to have a nonbinding "say on pay" vote each year. They voted down all five company-opposed proposals, including one calling for the board to rescind stock grants and another asking GE to disclose more about the use of animal testing at its healthcare unit.
GE competes with some of the world's largest businesses, including Germany's Siemens AG, French industrial group Alstom SA and Swiss engineering company ABB Ltd.
(Reporting by Scott Malone; Editing by Gerald E. McCormick, Dave Zimmerman)