As GE profits rise, investors wonder about cash plans

Fri Jan 18, 2013 1:56pm EST
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By Scott Malone

(Reuters) - What's Jeff Immelt going to do with the money?

General Electric Co (GE.N: Quote) shareholders are wondering what the company's chief executive plans to do with a cash windfall that could total tens of billions of dollars over several years as the company sells its remaining stake in NBC Universal and recoups more of the profits earned by finance unit GE Capital.

Last year GE Capital sent $6.4 billion back to the company's headquarters in Fairfield, Connecticut. Analysts estimate that the unit could generate a similar amount of cash this year.

But GE could get an even bigger infusion in mid-2014, when it is set to cash in on its option of selling the rest of its stake in NBC Universal to Comcast Corp (CMCSA.O: Quote). The stake is currently valued at roughly $17 billion, but the final price and timing of the deal could vary.

Immelt spoke with investors on Friday in a conference call after GE posted earnings that rose 7.5 percent from a year earlier, beating expectations.

During the call, the CEO of the largest U.S. conglomerate was cagey about his spending plans. He did not venture far beyond his often-repeated mantra that GE's priorities were balanced between raising its dividend, buying back shares and doing some small takeovers.

"This company is going to have a ton of cash over the next three years, right?" Immelt said. "I don't really want to make any other pronouncements other than disciplined and balanced capital allocation. We'll go over the other bridges as we get there but let's start with that."

GE shares were up 3 percent on a day that major U.S. stock indexes barely budged.   Continued...

A GE logo is seen in a store in Santa Monica, California, October 11, 2010. GE will release its third quarter earnings on Friday. REUTERS/Lucy Nicholson