- The Washington Times - Friday, January 17, 2003

FAIRFIELD, Conn., Jan. 17 (UPI) — General Electric Co. said Friday its fourth-quarter net income dropped 21 percent after taking a large charge at its troubled reinsurance unit.

GE, which makes everything from light bulbs to X-ray machines, said its fourth-quarter net income fell to $3.1 billion, or 31 cents a share, from $3.93 billion, or 39 cents a share during the same period last year.

Analysts on Wall Street were expecting GE to post a net income 31 cents a share, according to Thomson First Call.

GE said it took the after-tax charge of around $1.4 billion, at Employers Reinsurance Corp. to shore up reserves hit by higher-than-expected losses from asbestos litigation and claims from the Sept. 11, 2001, attacks on the World Trade Center.

Fourth-quarter results also include the effects of a $514 million gain from NBC's exchange of certain assets for the cable network Bravo; during the quarter NBC and other industrial businesses recorded $301 million after tax of restructuring and other charges.

Revenues rose 4 percent to record $35.4 billion from $34 billion a year ago.

Industrial sales increased 8 percent over the fourth quarter of 2001, with product services growing 18 percent to $6.3 billion. Financial Services revenues declined 3 percent to $15.5 billion, on lower interest rates, while net revenues (revenues less interest costs) at Commercial Finance, Consumer Finance and Equipment Management grew 17 percent, GE said.

For the full year, GE earned $15.1 billion, a 7-percent increase over 2001. Consolidated revenue for the year increased 5 percent to $131.7 billion.

Jeff Immelt, chairman and chief executive officer, said, "GE delivered solid results in a very challenging economy, with excellent performances by several businesses and one major disappointment.

"Power Systems, NBC, Commercial Finance, Consumer Finance and Medical Systems all had record years. We also had remarkable performances by Aircraft Engines and Aviation Services, our aircraft leasing business, in the worst year for aviation in recent memory. Our businesses posted impressive customer wins and continued to invest in technologies and services that will position them for long-term success. I'm proud of the performance of the GE team in such a tough environment," Immelt said.

Looking ahead, Immelts said, "GE businesses strengthened their leadership positions in 2002, and they are positioned for solid operating performance in 2003.

"We expect to deliver earnings per share growth between 3 percent and 13 percent, with broad-based earnings growth at our businesses. Power Systems will experience the long-anticipated decline in U.S. gas turbine sales. However, Power's energy services, oil and gas, and renewable energy businesses will grow earnings in excess of 20 percent," he added.

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