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Immelt Downplays NBCU Acquisition Plans

Jan 21, 2005  •  Post A Comment

General Electric Chairman Jeffrey Immelt said Friday that making acquisitions to bolster the NBC Universal unit is “reasonably low” on his list of priorities, dashing the hopes of some observers who have been speculating for weeks that NBCU might be gearing up to make another acquisition.

The comments, made during the company’s fourth-quarter earnings call, came as speculation has grown in recent weeks that NBCU could be gearing up to make a purchase to strengthen its position as a major media player, as executives have articulated during past investor conferences.

“I like what we’ve got right now,” Mr. Immelt said in response to a question about future NBCU acquisitions. “There’s nothing we need.”

GE executives noted Friday that NBCU is poised for continued strong growth in 2005, with the company expected to generate 50 percent segment profit growth for the 2005 first quarter, driven by continued strength of the unit’s cable channels and strong performance of DVD sales. The company said that while it is disappointed with its broadcast network’s ratings this season, the numbers are meeting expectations.

Those factors helped NBCU generate a 60 percent surge in segment profit for the fourth quarter of $860 million, versus $536 million a year earlier. Revenue was $4.3 billion, compared with $1.9 billion in the year-ago period. For the year, NBCU’s segment profit was up 28 percent to $2.6 billion, while revenue was up 15 percent to $15.6 billion.

Overall, GE’s net earnings were up 18 percent to $5.4 billion for the fourth quarter, on an 18 percent increase in revenue to $43.7 billion. For the year, GE’s profit was up 11 percent to $16.6 billion on a 14 percent rise in revenue to $152.4 billion.