GE's Immelt: U.S. economy "good" despite dips

By Scott Malone

NEW YORK (Reuters) - General Electric Co. (GE.N) Chief Executive Jeff Immelt said on Tuesday the U.S. economy is on solid footing despite the slowing housing market, and that despite a spate of major deals in the media industry, GE is not looking to sell its NBC Universal business.

"The U.S. economy is good," Immelt said in an interview with Reuters. "It hit a few bumps vis-a-vis the housing market and things like that, but on balance the U.S. economy is fine. What's exciting today is that the global markets are really accelerating, and if you look at Western Europe and Japan, stronger than they've been in decades."

Investors in GE, which now generates about half its revenue outside the United States, said strong foreign growth would be key to the company's financial performance, particularly as the U.S. economy slows.

"Their day in the sun is coming, especially looking at the strength in the international market as opposed to the U.S. market," said Peter Sorrentino, senior vice president and portfolio manager at Huntington Asset Advisors of Cincinnati, which owns GE shares. "I just think that they have got the wind at their back in that arena."

Asked if the current wave of deal-making in the media sector would cause the company to reevaluate the idea of selling NBC, Immelt said, "I only think about things that add value to investors, and always look at options, but it's not really top of mind right now."

The company is not looking to make additional acquisitions in the media industry, he said. GE owns 80 percent of NBC Universal, with France's Vivendi (VIV.PA) holding the rest.

"We've got a good digital presence, we've got a good content presence, we've got excellent global presence and I don't see a big transformative deal," Immelt said. "It's $16 billion of revenue, we've got plenty of girth."

This month Rupert Murdoch's News Corp. NWSa.N made a $5 billion bid for Wall Street Journal publisher Dow Jones & Co. DJ.N and Canadian publisher Thomson Corp. TOC.TO agreed to buy Reuters Group Plc RTR.L for $17.2 billion.

HEALTHCARE A FOCUS

Immelt spoke to Reuters on the sidelines of an event where the company discussed its fast-growing health-care business.

GE Healthcare last year generated revenue of $16.56 billion, accounting for 10.1 percent of GE's $163.39 billion in total revenue. It reported profit of $3.14 billion, representing 11.9 percent of total GE segment profits.

"It's in a market that's growing at three times the global GDP (gross domestic product), so, boy, it certainly could be a bigger portion of the company," Immelt said. "There's no doubt about that."

Peter Klein, senior portfolio manager at Fifth Third Asset Management, a Cleveland, Ohio-based company that manages about $20 billion in assets and owns GE shares, said of GE Healthcare: "That's the kind of stuff that has the growth, because we're all getting older ... They want to have a healthy exposure to an area that's going to be in bigger demand."

Fairfield, Connecticut-based GE is the world's second-largest company by market capitalization, behind Exxon Mobil Corp. (XOM.N) Its operations range from manufacturing jet engines to commercial lending. Immelt has been chairman and CEO GE since September 2001.

GE shares have moved little in the past three years, mostly holding in a range between $32 and $38, underperforming the broader U.S. market. So far this year, they are down 0.7 percent, at a time when the blue-chip Dow Jones industrial average, of which GE is a component, is up 8 percent.