Replies to post #9959 on The Rising Influence of Rising Affluence

[DewDiligence]

GE is paying an additional $6B(!) in US income tax to bring accumulated profits from ex-US finance subsidiaries back to the US (where it can be used for share buybacks and other corporate purposes).

[DewDiligence]

GE’s 2Q15 oil & gas sector:

http://www.wsj.com/articles/general-electric-results-top-expectations-1437129893

Crude oil’s slump slashed profit at GE’s oil and gas business by 12% to $583 million and its revenue slipped 15%. At GE’s Lufkin subsidiary, which makes oil production equipment, orders fell 40% in the quarter, according to Jeff Bornstein, GE’s chief financial officer. Service revenue slumped in all of its units as oil exploration and production companies have slashed budgets to cope with falling prices

The company has warned investors that its oil and gas sales and earnings could fall as much as 10% this year.

[DewDiligence]

GE rises 5% on Nelson Peltz’s $2.5B stake:

http://www.wsj.com/articles/activist-firm-trian-makes-a-big-bet-on-ge-1444017706

Mr. Peltz’s Trian Fund Management LP said it has accumulated $2.5 billion in GE shares since the middle of May—a roughly 1% stake—making it one of the company’s top 10 shareholders. It amounts to the biggest investment ever for the investment firm, which has a history of pushing well-known companies to dramatically reshape themselves.

…In a “white paper” Trian said it would disclose publicly Monday, the firm calls for the company to steepen cost reductions, consider getting rid of even more of the finance arm and be more cautious on acquisitions. It says the company could take on $20 billion in debt and repurchase shares. In the paper, a copy of which was reviewed by The Wall Street Journal, Trian bemoaned what it calls a “lost decade” for the company’s shares.

…GE, with its $257 billion market capitalization, would be the third-biggest company to be targeted by an activist ever, trailing only campaigns by Carl Icahn at Apple Inc. and ValueAct Capital Management LP at Microsoft Corp., according to FactSet.

For readers of this board, Peltz is a well-known activist investor who played a role in M&A of other companies discussed here (e.g. Heinz).