General Electric Company
) recently received a $4.7 billion contract along with
) and two other Chinese companies from South African rail firm
Transnet SOC Ltd. The deal is reportedly one of the largest
infrastructure contracts awarded by South Africa and is part of
an ambitious seven-year plan to overhaul the country's railways,
ports and pipelines.
The deal entails the quartet to manufacture 1,064 electronic and
diesel locomotives. Except the first 70 trains, the locomotives
will be built at Transnet's Pretoria and Durban facilities, with
the state-owned rail operator contributing about 16% to the
South Africa will utilize the new trains to upgrade the general
freight fleet that has an average age of 33 years. In addition to
boosting a lackluster economy with significant investment in
infrastructure, the project is also likely to generate 30,000
jobs for the country.
The contract supports General Electric's recent focus on its
industrial business. The company is devoted to reducing credit
risks by divesting its Retail Finance business. General Electric
has also filed an initial public offering (IPO) of its North
American consumer lending unit.
The IPO is expected to be closed by late 2014. Subsequently,
GE Capital Retail Finance will operate under the name "Synchrony
Financial" and will trade on the New York Stock Exchange under
the symbol SYF.
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General Electric is one of the largest and the most diversified
technology and financial services corporations in the world. With
products and services ranging from aircraft engines, power
generation, water processing, and security technology to medical
imaging, business and consumer financing, media content, and
industrial products, the company serves over 100 million
customers worldwide. Its segments include Power & Water, Oil
& Gas, Energy Management, Aviation, Healthcare,
Transportation, Home & Business Solutions, and GE Capital.
General Electric currently has a Zacks Rank #3 (Hold). Other
stocks in the industry that look promising at current levels
include Zacks Rank #1 (Strong Buy)
Federal Signal Corp.
) and Zacks Rank #2 (Buy)