General Electric Co sees 2013 sales up despite 'fiscal cliff' fears

Dec 18 2012, 11:06 IST
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SummaryGeneral Electric Co expects revenue to be flat or up as much as 5 percent next year.

General Electric Co (GE) expects revenue to be flat or up as much as 5 percent next year, though its top executive said on Monday that worries about the "fiscal cliff" had hurt demand in the closing months of 2012.

In the face of an uncertain economy, the largest US conglomerate said it expects to increase profit next year, but did not say by how much.

Rather, Chief Executive Jeff Immelt repeated his goal of continuing to boost operating margins.

"There's still a lot of macroeconomic volatility and we're running our business at a lower cost rate," he told analysts, adding that the company planned "some restructuring" as it continues to cut costs and is not counting on any improvement in the European economy any time soon.

GE expects organic revenue at its industrial units - a measure that excludes exchange-rate fluctuations and any acquisitions or unit sales - to grow by 2 to 6 percent next year, with weak sales of wind turbines partially offsetting growth in other areas.

The world's largest maker of jet engines and electric turbines aims to boost profit margins by 70 basis points in 2013, an increase that would raise its operating margin to about 15.8 percent of sales.

GE forecast double-digit percentage profit growth at businesses that make equipment used in oil and gas production, railroad locomotives and appliances and lighting.

Profit at its GE Capital finance arm, which it continues to scale back, could be flat to up by a single-digit percentage.

Immelt warned investors at a meeting in New York that the slow progress of negotiations in Washington to head off a year-end "fiscal cliff" of higher taxes and government spending cuts - which could push the economy into recession next year - was taking a toll on business.

"There's no doubt the fiscal uncertainty slowed activity in the fourth quarter of the year," said Immelt, who is an adviser to President Barack Obama on the economy and also a member of a coalition of top US CEOs pushing for a debt deal.

"We're cautious about next year," he told a small group of reporters.

"But we've got a very well-run business.

" GE's 2012 industrial revenue, a measure that excludes the company's sizable finance business, will be up about 8 percent, below the 10 percent target Immelt discussed with investors in September.

"We're going to have a cost hedge in our plan in case there's more disruption next year," he said.

"I think that's

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