Topper Jeff Immelt awaits Vivendi decision
General Electric topper Jeff Immelt said GE is prepared for several scenarios should Vivendi choose to unload its 20% stake in NBC Universal.He envisioned a possible initial public offering or taking on a new partner, but “I don’t have any specific announcement,” he said during a conference call Friday to discuss GE’s third-quarter results. “Vivendi has been a great partner. They’ve had a window every year, and this year we just wanted to be ready for several scenarios,” he said. NBC Universal, he added, “is in great shape all over. It’s a great franchise, a solid performer.” Vivendi has a three-week window starting Nov. 15 to exercise a ‘put’ option to divest its stake in NBC U. If GE doesn’t buy the stake outright, Vivendi could launch an IPO. GE is said to have cable operator Comcast waiting in the wings to acquire a majority stake of the entertainment company if Vivendi exercises it option. GE said NBC U’s profit rose 13% to $732 million for the three months ended Sept. 30. Revenue of $4.1 billion was down 27% from the year earlier, in part on weaker advertising. Execs said the scatter market is strong. They noted the revenue figure includes a $1 billion bonanza from the Beijing Olympics, without which the number would have been flat year-on-year. And profits would have been squeezed without one-time items, like a gain from of GE’s stake in the A&E cable network to Lifetime. NBC U’s own cable networks, led by USA, drove the company’s growth. Studio revenue fell 20% to $1 billion on tough comparisons from the year before and a weaker than expected performance at the box office. Universal Studios chief Ron Meyer recently fired Universal Picture co-heads Marc Shmuger and David Linde. GE’s total profits fell 44% to $2.5 billion on lower earnings at financial arm GE Capital. The company is shrinking the finance business, which was hard hit by the mortgage and credit crisis. While the unit is still struggling, there are signs of stability, execs said. GE’s revenue fell 20% to about $38 billion. The huge company is seen as bell-weather for the broader economy, and the results showed some hopeful signs. Orders for industrial equipment were down 18% from a year ago, but the rate of decline slowed sharply from the second quarter, when orders fell 40%. Immelt said the global economic environment is improving, but slowly, and a recovery will be gradual. “We see signs of life,” he said.
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