GE's Pathetic Performance

The weekend Wall Street Journal contained information on GE's first quarter performance results. I've written so many posts about GE and the inept management and misleadership of its CEO, Jeff Immelt, that it's not worth my linking to them. Just click on the appropriate labels.


For years, I have argued for splitting up this pointless conglomeration of different businesses, and this past quarter is yet more evidence of the wisdom of my position.


The headline on the Journal article makes my point succinctly- "GE's Net Tumbles 35% on Finance-Unit Woes."


Basically, shareholders are getting punished for the real fundamental and market-based technical issues involving the finance unit, obliterating any positives which may have resulted from any of the four other units, were they free-standing entities.



The accompanying Yahoo-sourced price chart of GE and the S&P500 Index for the past three months demonstrates that, once again, holding the needlessly-diversified conglomerate cost shareholders returns they could have earned, with less risk, in the index.



There was a notable caveat in the results, in that mark-to-market values are not contained in the quarter's performance, but will be included next quarter.



Even the Wall Street Journal noted, in an article last month, questions among analysts regarding GE's mortgage portfolio. Their reserve adequacy was doubted. Reserves, which, if GE were a regulated bank, might have to be increased dramatically.



There just seems to be no end to Immelt's mismanagement of the conglomerate that should not even exist any longer.