General Electric said yesterday that its purchase of television rights for the Beijing Olympics in 2008 would generate up to $1 billion (€825 million) for its other businesses.
The forecast came as the US conglomerate underscored the robustness of the current earnings' season with a 33 per cent rise in orders during the first quarter, well ahead of analysts' forecasts after what was viewed as a disappointing performance in the last three months of 2005.
"We had a strong quarter in a good economy," said Jeff Immelt, chairman and chief executive, on an analysts' call as the company reported a 9 per cent rise in net profits to $4.3 billion in the quarter to March 31st.
Five of GE's six business units delivered double-digit percentage gains in earnings during the quarter, with earnings at its NBC Universal media business slipping 8 per cent after suffering a $70m loss from its investment in TV rights for the Winter Olympics in Italy.
"I still like the Olympics," said Mr Immelt, adding that the winter games would be slightly positive for earnings overall when fees from affiliate stations were booked. He said Turin had been "a difficult venue" while "Beijing is going to be a whole different story".
"We have a funnel from Beijing of about $1.2 billion and we expect to get $800 million-$1 billion," he said, referring to business it expects to book for its other units.
The performance of the media unit was the only dark spot in the first-quarter report as the strong order flow cut across business and geographic lines and contributed to an 18 per cent rise in earnings per share. However, GE left its guidance for the rise in full-year EPS unchanged at 13-17 per cent.The company also reported organic sales growth of 9 per cent.
Mr Immelt reorganised the company into six business lines last June in an effort to improve cross-selling and efficiency opportunities. This followed an acquisition spree which had seen the company spend $50 billion to expand all of its units. - (Reuters)
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