Purge might extend to lighting and NBC

ASSOCIATED PRESS

NEW HAVEN, Conn. -- General Electric Co. plans to sell or spin off the appliance business that for a century has put refrigerators, washing machines and dishwashers in American homes in a move that some analysts say shows one of the world's largest companies may shed other cherished assets.

The industrial conglomerate said in a statement Friday the move is part of an ongoing plan to exit "slower growth and more volatile businesses."

Last year, Fairfield, Conn.-based GE shed its underperforming plastics business by selling it to a Saudi Arabian company for $11.6 billion.

"We think this is further recognition the company needs to exit the slow and no-growth businesses," said Robert Schenosky, an industrial analyst with Jefferies & Co. in New York who has long favored such moves. "It's a recognition that there is not anything that is untouchable at this point."

Schenosky said it's hard to predict what else GE might sell.

"Certainly other candidates could include the lighting business and even potentially NBC Universal," Schenosky said.

GE has a lighting division in Lexington.

GE could be a dramatically different company in the coming years, Schenosky said. He also said the company needs to look at the type of acquisitions it makes, saying deals in health care and entertainment made the company larger but did not boost earnings power in a meaningful way.

Matt Collins, an analyst at Edward Jones in St. Louis, said he would not be surprised to see GE sell its lighting and electrical distribution businesses.

"I think we'll continue to see them make strategic moves to get the stock working over the long term," Collins said.

GE shares fell 24 cents to $32.13 in trading Friday, near their 52-week low. Shares have traded between $31.50 and $42.15.

The stock had its worst day in decades last month after the company reported a smaller-than-expected first-quarter profit and lowered its outlook for the full year.

Chairman and Chief Executive Jeff Immelt has rejected calls to sell NBC, though he has been under pressure to restructure the industrial and financial conglomerate, particularly since last month's surprising first-quarter earnings report that profit fell 6 percent. Analysts estimate sales in the appliance business are likely to decline between 10 percent and 12 percent this year. That stems from weak consumer spending and a drop in home improvement sales and residential construction.