General Electric (
) reported earnings Friday and announced details of the spin-off
of its retail finance unit, which will be called Synchrony
Financial with the ticker SYF.
The earnings report was generally lauded by commentators even
though it missed, but most of Wall Street's chatter had to do
with Synchrony. General Electric said it plans to sell 125
million shares by the end of July at an offering price of 23 to
26 a share, raising $3.1 billion. GE will retain 85% of Synchrony
after the sale.
Before the financial crisis, financing operations generated
more than half of GE's revenue, but CEO Jeff Immelt is trying to
return the company to its roots as an industrial giant. GE makes
jet engines, power generators, oil and gas equipment and medical
GE reported Q2 earnings of 35 cents a share, a 13% increase
from the year-ago quarter and below estimates, along with the
company's 3% rise in revenue, which is likely why the stock was
down more than 1% for the day.
The company also noted that revenue from industrial operations
rose 7%, while its financing unit declined by 6%. Synchrony
handles private-label credit cards for big retailers likeWal-Mart
) andGap (
GE is involved in numerous acquisitions designed to improve
its might in the industrial field. French power-generation
equipment maker Alstom accepted GE's offer to acquire it, which
is expected to be completed some time next year.
GE pays a quarterly dividend of 22 cents a share, which works
out to an annual yield of 3.3%. The next payout is July 25 to
stockholders of record on June 23.
Its reliance on the financial sector has had its effect on
The company offered a 31-cent-per-share quarterly dividend in
early 2009, but was forced to reduce it to 10 cents once the
effect of the financial crisis kicked in.