GE, Credit Cards, Auto Loans, Cell Phones & The Recession
Make the number... GE, worlds 3rd largest comnpany, behind PetroChina and Exxon Mobil...
matching expectations, posted a 4% rise in net profit on a 17.7% rise in revenue.
GE Infrastructure, the company's biggest unit, had a 26% increase in profit for the quarter, led by gains in its oil and gas, aviation and energy units.
Clearly foreign operations delivered the bulk of the strength in the quarter as more than one half of GE's revenues came from outside the United States.
CEO Jeff Immelt: "The U.S. economy has slowed. Housing has been tough. The consumer is feeling some strain right now."
Q4 profit 66 cents per share vs 62, a year ago. GE expects 50 to 53 cents per share in Q108...
and warned that profit at GE Money could be down 20% in the quarter. GE shares up 3% on the news, still down 7% in the last year.
Credit cards... last week American Express announced that credit card debt at least 30 days past due...
had climbed to 3.2% from 2.9% in Q3, and write-offs of bad debt had climbed to 4.3% from 3.7% . In 2008, AmEx expects an of average 5.1% to 5.3%.
Auto loans... Sovereign Banc said it would take $1.6 billion in charges for Q4, including a $600 million write-down on consumer and auto loans.
Sovereign has pulled out of the auto loan market in Arizona, Florida, Georgia, Nevada, North Carolina, South Carolina and Utah because of rising default levels.
Cell Phones... Sprint Nextel #3 3 U.S. mobile phone service reported...
net losses of 683,000 post-paid subscribers on Friday and said it would cut about 4,000 jobs, and close 125 stores.
Sprint predicted further pressures on its ability to attract subscribers and turn a profit in 2008, sending its shares down 19%.
Spending Down... Kohl's, AnnTaylor and J.C. Penney cut profit forecasts Jan. 10...
after reporting declines in December same store sales. Luxury jeweler Tiffany said last week the slump may continue into January.
Not making the number... University of Michigan consumer confidence came in higher than expected at 80.5 vs a 2 year low 75.5 in Dec. However...
December leading indicators -0.2%, vs November's -0.4%, a 3rd straight decline pointing to recession.
Don't worry, its coming... Merrill Lynch January survey of 195 investment firms managing $671 billion showed that almost one in five see a global recession as "likely" or "very likely" in the coming year.
Zero growth or another 5% down.. Mark Mobius, Templeton Asset Management:
"If there is zero growth in the U.S., not only emerging markets but markets around the world would be impacted. A 20% decline for emerging markets would be quite normal."
MSCI Emerging Markets Index dropped to the lowest in four months. The gauge of 926 stocks has lost 15% from its high on Oct. 29, leaving only another 5% decline for Mr Mobius to be on the money.
matching expectations, posted a 4% rise in net profit on a 17.7% rise in revenue.
GE Infrastructure, the company's biggest unit, had a 26% increase in profit for the quarter, led by gains in its oil and gas, aviation and energy units.
Clearly foreign operations delivered the bulk of the strength in the quarter as more than one half of GE's revenues came from outside the United States.
CEO Jeff Immelt: "The U.S. economy has slowed. Housing has been tough. The consumer is feeling some strain right now."
Q4 profit 66 cents per share vs 62, a year ago. GE expects 50 to 53 cents per share in Q108...
and warned that profit at GE Money could be down 20% in the quarter. GE shares up 3% on the news, still down 7% in the last year.
Credit cards... last week American Express announced that credit card debt at least 30 days past due...
had climbed to 3.2% from 2.9% in Q3, and write-offs of bad debt had climbed to 4.3% from 3.7% . In 2008, AmEx expects an of average 5.1% to 5.3%.
Auto loans... Sovereign Banc said it would take $1.6 billion in charges for Q4, including a $600 million write-down on consumer and auto loans.
Sovereign has pulled out of the auto loan market in Arizona, Florida, Georgia, Nevada, North Carolina, South Carolina and Utah because of rising default levels.
Cell Phones... Sprint Nextel #3 3 U.S. mobile phone service reported...
net losses of 683,000 post-paid subscribers on Friday and said it would cut about 4,000 jobs, and close 125 stores.
Sprint predicted further pressures on its ability to attract subscribers and turn a profit in 2008, sending its shares down 19%.
Spending Down... Kohl's, AnnTaylor and J.C. Penney cut profit forecasts Jan. 10...
after reporting declines in December same store sales. Luxury jeweler Tiffany said last week the slump may continue into January.
Not making the number... University of Michigan consumer confidence came in higher than expected at 80.5 vs a 2 year low 75.5 in Dec. However...
December leading indicators -0.2%, vs November's -0.4%, a 3rd straight decline pointing to recession.
Don't worry, its coming... Merrill Lynch January survey of 195 investment firms managing $671 billion showed that almost one in five see a global recession as "likely" or "very likely" in the coming year.
Zero growth or another 5% down.. Mark Mobius, Templeton Asset Management:
"If there is zero growth in the U.S., not only emerging markets but markets around the world would be impacted. A 20% decline for emerging markets would be quite normal."
MSCI Emerging Markets Index dropped to the lowest in four months. The gauge of 926 stocks has lost 15% from its high on Oct. 29, leaving only another 5% decline for Mr Mobius to be on the money.
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