Tomahawk, WI 12/23/2013 (BasicsMedia) – General Electric Company (NYSE:GE) has seen it all in the past decade. Lesson learnt in the past decade are now finding application in the upcoming years. The company has made it clear that it would wish to shrink its operations without necessarily hurting its profits and value to investors.

Over the past 12 months the company has been aggressively trying to reduce its exposure to finance, and this explains why is ready to split from its retail finance business in North America as early as next year. The company can also been seen consolidating is operations to remain lead and less exposed to market risks.

Pentagon defense contracts

General Electric Company (NYSE:GE) has won three out of the 37 contracts awarded by Pentagon. These contracts are to its aviation unit which in recent times has been going greatly. In fact, the company is set to enter 2014 with more than $220 billion in backlog orders majorly from its aviation segment.

As for the Department of Defense contracts, General Electric Company (NYSE:GE) has won three lucrative engine supplies contracts which are expected to run through December next year. In one contract, the company will provide engine systems and engineering services F404 aircraft engine. This contract captures the U.S. Navy as well as other governments such as Spain, Kuwait, South Korea, Australia, Finland, Canada, Switzerland, Malaysia and Sweden. This contract is valued at $7.5 million.

In another contract, General Electric Company (NYSE:GE) will deliver orders and related services for F414 Engine and the contract cost of $7.8 million. The clients in this contract are the U.S. Navy and Australia.

Yet another contract is the $8.5 million supply and service for engine combustion liners for the U.S. Air Force. This contract is expected to run through April, 2015.

Margin expansion and cost reduction

After a season of not-so-good performance due to the challenges in its financial segment, General Electric Company (NYSE:GE) is under pressure to deliver solid shareholder value in 2014. In order to avoid issues with activist investors who can always stage a management change when things are not moving in the direction they desire, the company can be seen continuing its margin expansion and cost reduction efforts.

The key areas which need action are the company’s structural costs. Selling, general and administrative costs have been eating the company’s profits and now the management is trying to plug these holes. This year, the company has been to reduce this cost segment by about $1.5 billion and by next year, plans are aimed at saving another $1 billion in structural cost.

By cutting on structural cost, General Electric Company (NYSE:GE) is able to lift its margins and thus profits. The company is taking measures to ensure that its big size does not turn into financial burden. Also, the company is increasing putting measures into place to ensure that its financial segment does not bog in down in the upcoming years as it did in the era of financial crisis.

Market situation

General Electric Company (NYSE:GE) is looking for a positive market improvement 2014. The U.S. economy is expected to pick up strongly and this is expected to jolt emerging markets. In so doing, the company hopes to offset the weakness that is expected in Europe where the market situation is till fluid.

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