GE's early NBC deal speeds Immelt's refocus of company

Wed Feb 13, 2013 12:39pm EST
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By Scott Malone

(Reuters) - General Electric Co expects to return about $18 billion to investors this year as it sells its remaining stake in NBC Universal, a move that executives said should allow it to achieve its long-held goal of buying back the shares it issued in the depths of the financial crisis.

The sale, which came more than a year earlier than expected, is the latest step in Chief Executive Jeff Immelt's campaign to refocus the largest U.S. conglomerate back on its industrial roots.

The news sent shares of the world's biggest maker of electric turbines and jet engines up 3 percent, to their highest point since October 2008, when the financial crisis was threatening to undermine the company.

In a Wednesday morning conference call with analysts and investors, Immelt emphasized that he would stick with the company's current capital allocation plan, which calls for buying back shares, raising its dividend and pursuing small acquisitions typically no larger than $3 billion.

That is change from what GE did in 2010 and 2011 with the first half of its money from selling NBC Universal to Comcast Corp, when it embarked on a $12 billion wave of takeovers to boost its presence in the energy sector.

"This allows GE to focus completely on the industrial business," said Zahid Siddique, associate portfolio manager at the Gabelli Equity Trust, a GE shareholder, though he added that he would not be surprised if the Fairfield, Connecticut-based company eventually used some of the NBC proceeds to expand its presence in the mining sector, an industry that GE officials have called attractive.

Bernstein Research analyst Steven Winoker noted that even with GE's plan to buy back $10 billion of shares this year, it could end up with as much as $15 billion to put towards takeovers.

This year's buyback should reduce the company's share count below 10 billion, said Chief Financial Officer Keith Sherin. GE currently has 10.49 billion shares outstanding, according to Reuters data.   Continued...

General Electric (GE) Chairman and CEO Jeff Immelt delivers the opening remarks before a panel discussion hosted by GE on "The Future of Manufacturing: Growing American Competitiveness" at the Mellon Auditorium in Washington February 13, 2012. REUTERS/Gary Cameron