General Electric Co. believes the global economy is continuing to improve and that earnings growth at the largest U.S. conglomerate over the next few years will be the best it has seen in a decade, top executives said.
Rising oil prices have not yet taken a toll on global growth rates, Chief Executive Jeff Immelt said at the company's shareholders meeting Wednesday.
"Things are getting better every day. The global economy outside the U.S. is strong," he told reporters ahead of the annual meeting.
Asked about oil prices, which have risen about 33 percent over the past year on rising demand, particularly in emerging markets, Immelt said they have not yet taken a toll on growth.
"It's something to think about, but it doesn't seem to be hurting the economy," he said.
The U.S. economy is also improving, he added, although the housing sector remains a weak spot.
The company believes its profit growth over the next few years will be the best it has seen in a decade, officials said.
"This is the best earnings outlook we've had in the last 10 years," Chief Financial Officer Keith Sherin told the shareholders.
GE no longer provides investors with numeric profit forecasts, but analysts on average look for earnings per share excluding one-time items to rise 16.5 percent this year, according to Thomson Reuters I/B/E/S.
NUCLEAR OUTLOOK UNCLEAR
The future of the nuclear power industry is unclear in the wake of the disaster at Japan's Fukushima power plant, where GE designed the turbines, Immelt said.
"It's too soon to say what the future of the nuclear business is going to be," he said. GE's nuclear operations are a joint venture with Japan's Hitachi Ltd.
The world's largest maker of jet engines and electric turbines has seen its stock price more than triple from its recessionary lows below $6, though the shares remain at about half their level before Immelt took the top job from Jack Welch a decade ago.
In his address to shareholders, Immelt noted that even through the recession and financial crisis, "in every year we earned more money than when the stock traded at an all-time high."
GE shares were up 2.7 percent to $20.64 in midday trading on the New York Stock Exchange. Over the past year, the shares have risen 4 percent, lagging the 12 percent rise of the Dow Jones industrial average, of which it is a component.
The Fairfield, Connecticut-based company has raised its dividend three times by a total of 50 percent since last July, pushing the quarterly payout to 15 cents per share, in line with the company's goal of paying out 45 percent of profit to shareholders.
But the dividend is still less than half the 31 cents a share GE was paying quarterly before it slashed the payout during the financial crisis.
GE, which employs about 134,000 people in the United States, each year holds its shareholders meeting in a different city where it has operations. Its energy, healthcare and finance arms all have a presence in Salt Lake City.
The company competes with some of the world's largest businesses, including Germany's Siemens AG, French industrial group Alstom SA and Swiss engineering company ABB Ltd.
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