General Electric purchases rattle Wall Street
NEW YORK — Universal Studios’ new parent, General Electric, saw earnings slip last quarter, but that didn’t stop it from announcing another massive acquisition Friday, sparking investor worries that the company may be spreading itself too thin.
GE’s profit fell 11% to $3.6 billion in Q3, weighed down by gas turbines, plastics, aircraft engines and an accounting charge. Revenue nosed up 2% to $33.4 billion.
The Fairfield, Conn.-based company Friday unveiled a $9.5 billion purchase of U.K. medical diagnostics company Amersham. That deal came two days after GE and Vivendi Universal agreed to merge NBC and the latter’s entertainment assets. Earlier this month, GE closed on another major purchase, Finnish medical group Instrumentarium.
At NBC, which CEO Jeffrey Immelt called one of the conglom’s most solid growth engines, revenue rose 11% to more than $1.5 billion and operating profit surged 31% to $431 million.
GE waxed enthusiastic about its TV biz, noting the Peacock led the summer ratings in primetime among adults 18-49 for the ninth year in a row and has continued its strong perf into the fall. NBC also has doubled ratings for newly acquired cable net Bravo, largely due to “Queer Eye for the Straight Guy.”
GE stock fell 2.69% to $29.32 as Immelt warned that earnings in the current fourth quarter might fall short of expectations. He also reassured investors that the current flurry of deals makes strategic sense.
“We have enhanced our fastest-growing businesses. I feel great about the company’s position and extremely excited about the moves we made this week to strengthen the company,” Immelt said.
He added that the Universal deal was a unique opportunity to gain control over content and distribution and develop a more balanced revenue enterprise — or one that is less dependent on advertising.
The merger is expected to close in the first half of 2004.