GE CFO upbeat on prospects
Strategy & Planning on Tue, 20/07/2010 - 08:43
General Electric's CFO is confident that profit recovery in its financial business means it won't need a cash contribution from its industrial-side business.
"Based on our first-half pretax results, it seems that there shouldn't be any need for a contribution from GE to GE Capital," said GE Chief Financial Officer Keith Sherin."Overall, everything at GE Capital feels like it is getting better. We believe (the unit's second-quarter results are) the start of a long-term trend of positive earnings momentum."
He cited GE Capital's commercial real estate division as "the one tough area remaining”. The real estate unit's loss widened to $524 million in the second quarter, from $237 million in the year-ago period.
While the firm will be subject to the impact of new financial regulations, Sherin sees the knock on effect of these as being manageable and within expectations. "We can continue to own GE Capital, and the financial supervision will be focused on GE Capital," rather than on the overall conglomerate, he said.
Sherin also said he thinks GE Capital will be able to pay a dividend to its parent company, as it traditionally has done, in 2012, although not next year.