Tomahawk, WI 12/16/2013 (BasicsMedia) – General Electric Company (NYSE:GE) is one of the most diversified companies in the world. It offers products and services ranging from aircraft engines, medical imaging solutions, water processing, consumer finance, media content and industrial products.

The company’s operations span about 100 countries and servers more than 100 million customers worldwide. GE has had its fair share of challenges, post-recession. Among its various segments, GE Capital has been the main source of the problem. This being the case, the company is trying to avoid future problems by adjusting the operations of the segment.

The company is spinning off the retailer financing division of General Electric Company (NYSE:GE) Capital for North America. The IPO for this spin-off is slated for 2014.

New entity

The resulting unit after the spin-off will operate like an independent company. If GE spins 20 percent of the business as announced, the resulting entity will be valued between $16 and $18 billion. This will be quite a big financial solutions company to take on peers such as American Express Company (NYSE:AXP), Discover Financial Services (NYSE:DFS) and Capital One Financial Corp. (NYSE:COF).

The impact of this spin-off will be seen in General Electric Company (NYSE:GE)’s stabilizing balance sheet thereafter. Moreover, the spin-off will reduce the company’s outstanding shares by about a billion units. Currently GE has 10.12 billion shares outstanding and this is expected to come down to about 9 to 9.5 billion shares after the spin-off next year.

Reducing the number of outstanding shares has the direct impact of benefiting shareholders by improving the earnings per share.

Adjusting position in retail financing is the best approach to exit the challenges brought about by GE Capital. This will result in reduced expenses and losses which in time, will improve the company’s profit.As a diversified company, General Electric Company (NYSE:GE) is seen trying to focus on high-ticket segments such as Aviation, Power & Water, Oil & Gas, Energy management, Transportation and Healthcare.

Expected growth

General Electric Company (NYSE:GE) is expected to generate revenue between $146 and $147 billion this year. Going into next year, the company is carrying with it a backlog of $200 billion or more in orders, primarily from its aviation segment. This means that its growth is expected to be strong in the region of 7 – 8 percent annually, on its industrial side alone. This strong growth is expected to go on over the next five years.

As the company cuts down on operating expenses and expands its market, especially internationally, the recent dividend adjustments which saw the company lower its figures are expected to return to the previous highs in the few upcoming years.

Recovery happening steadily

General Electric Company (NYSE:GE) suffered from the impact of the financial recession. It has taken quite sometime and operation adjustments to get things back on the growth path. The good news is that a lot has happened in laying the ground for the future as reported about the spin-off in the financial arm. The company is also beginning to get more orders from its industrial operations.

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