Tomahawk, WI 12/10/2013 (BasicsMedia) – General Electric Company (NYSE:GE) is in a lot of businesses, and this means that it is also exposed to a lot of competition and, consequently, a lot of financial losses. It can be recalled that, in 2009, this broad presence in the market caused the company to lose its AAA credit rating and even trimmed the dividend it pays out to shareholders.

The result of these negative developments was that the company’s stock tumbled greatly by 83 percent from its highs in Oct. 2007, to just $7 per share in March 2009. Obviously this led to losses for the company and its investors. The reason GE faced such losses was due to the problem in its Capital division. GE Capital supplies 30 percent to the company’s profit, and this means that any trouble in the segment has a heavy impact in its overall financial position.

Having noted this problem, General Electric Company (NYSE:GE) is now in the process of spinning off its retail financing unit, which is about 20 percent of its financial arm – GE Capital. The spin off IPO for this unit is expected next year, and a year later, the company hopes to rid itself of its entire financial arm. The spin off of retail financing is one of the many strategies which the conglomerate is taking to streamline its operations so as to become more efficient and profitable going forward.

Spinning of units and shrinking operations in less-worth segments is also expected to bring more value to investors in the form of higher EPS and dividend. This will be achieved because the company’s direct outstanding shares are set to decrease. Currently, the company has 10.12 billion in outstanding shares and the same is expected to come down to 9 billion through spin off and share buyback.

General Electric Company (NYSE:GE) is seeking to boost its industrial and manufacturing units because of their higher margins and low risks. The company is going into 2014 with billions of dollars in backlog orders mainly from the two segments.

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