GE aims to boost dividends in 2011
2:47p ET March 16, 2010 (MarketWatch)
SAN FRANCISCO (MarketWatch) -- General Electric shares rose more than 3% Tuesday after the industrial giant told investors it aims to resume increasing the dividends its pays to shareholders some time next year.
"We're going to plan to resume growing the dividend again in 2011 at the GE parent level," GE Chief Financial officer Keith Sherin told investors attending a Goldman Sachs investor conference in Boston. "We're not putting a number on it, but we do expect to grow the dividend in 2011."
The company, part of the Dow Jones Industrial Average, cut its dividend in February 2009 for the first time since the 1930s. The move preserved GE about $9 billion in cash and bought it some breathing room while it struggled to get GE Capital, its lending and leasing unit, back on firmer financial footing.
Sherin assured investors that efforts to clear bad loans off its books and shore up its lending operations are paying off, even though the company expects its lending losses to peak in 2010.
"If you look going forward at GE Capital, at some point this loss cycle rolls over. We are seeing some positive signs and delinquency or non-earnings you've seen some of that in the fourth quarter," Sherin said.
Meanwhile, as the global economy emerges from recession, Sherin said the company plans to focus on infrastructure. "And the way we're going to grow infrastructure is the way we've done it in the past. Focus on technology, we're really increasing everything around organic growth," he added.
GE shares were up 3.3% by mid-afternoon at $17.88. The stock is up nearly 85% from where it was trading a year ago, compared with an average 48% advance by peers in the Dow Jones Industrial Average over the same period.
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