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The largest U.S. conglomerate and a Dow-30 member General Electric (GEFree General Electric Stock Report) has reported September-period results that met expectations on the earnings line, but fell a bit shy on the revenue front. The stock traded lower as investors seemed to focus on the top-line shortfall.

Share net for the period was $0.36, in line with both our call and Wall Street's estimates. Revenues rose 2.8%, to $36.35 billion, which fell just below our $36.71 view. Some in the investment community had anticipated this figure going as high as $37.00 billion after an upbeat presentation from the company in late September. We are not overly concerned, since exchange-rate fluctuations were the primary culprit. (Foreign exchange sliced roughly $1.1 billion from the top line during the three-month period.) Factoring in that difference, sales were actually above the initially set bar.

Although GE shares dipped on the news, the equity is still up about 40% over the past year, reaching levels not seen since before the financial crisis of 2008.

After today's news, and factoring in management's guidance, we are leaving our 2012 revenue and earnings estimates unchanged at $148 billion and $1.55 a share, respectively. Subscribers should also note that we are anticipating an increase to the dividend at the company's next meeting.

The effects of the European debt crisis were not lost on the company. Many industrial conglomerates have been hit hard by troubles on that Continent, and General Electric is no exception. Regardless, management has intimated that demand across the Atlantic has been about what was expected. The ability to plan for this setback gives the company a leg up on its peers.

A decisive plan to refocus on its core industrial roots is bearing fruit. Manufacturing jet engines, refrigerators, and equipment for energy companies is a steady growth model. Revenues from its industrial divisions rose 8% in the September quarter and are up 10% thus far in 2012. Fortunately, some hot subsectors are compensating for Europe's woes. For starters, the energy infrastructure branch is booming. Here, sales were up 12%, as oil and gas operations continue to bring in large contracts. A decision to beef up this platform with $11 billion worth of acquisitions over the last two-plus years should not go unnoticed on management's track record. This type of performance is more vital now than ever, due to the fact that sales at the aviation and healthcare arms fell 1% in the term.

Looking ahead to 2013, we are comfortable with our $1.75 share-net call. Uncertainty should rule the roost on the global economic landscape, but recent moves by GE's Board of Directors should cushion earnings results. Last month, plans were laid out to cut selling, general, and administrative expenses between $700 million and $1 billion next year. Too, a gradual decline in the share count is in full swing. CEO Jeffrey Immelt has stated he would like to get the company's shares outstanding to below 10 billion, about level with where it was before the financial crisis. At that time, a large number of new shares were released to raise cash. Already in 2012, $3 billion worth of stock has been bought back.

An update on the progress of the trimming of GE Capital seems appropriate, due to that entity's ability to always find its way into the headlines. That division reported an 8% gain in the third quarter, versus 2011's same period. Moreover, it paid a $2.4 billion dividend to the parent company, with total payouts year to date at $5.4 billion. Some industry watchers have begun to say that GE Capital should be left alone now that it's making worthwhile contributions. But the fact remains that this unit was the source of many of GE's problems during the financial crisis. The goal to transform this branch into a stable industrial lending business is wise. With that, the parent reported its quarter-ended net investment in the division was $425 million, putting the plan to shrink GE Capital ahead of schedule.

In closing, we continue to view this blue chip as a cornerstone investment for most portfolios. A recovering dividend will only serve to boost the issue's total return potential for the pull to 2015-2017. Those somewhat venturesome investors getting on board now may position themselves to reap the benefits of rumored spin-outs, particularly the consumer credit division, that could occur as soon as 2013.

About The Company: Founded in 1892, General Electric Company has grown into one of the largest and most diversified industrial companies in the world. Its variety of segments include Energy Infrastructure (30% of ’11 revenues); Aviation (13%); Healthcare (12%); Transportation (3%); Home & Business Solutions (6%); and Capital Finance (31%). On a geographic scale, more than half of General Electric’s revenues came from overseas in 2011.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.