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| GE |
"The objective is, at a minimum, [to] pay a dividend in 2012," Chief Financial Officer Keith Sherin told analysts on a post-earnings conference call. "We're obviously feeling pretty good about the progress in GE Capital."
GE Capital's dividend to GE was suspended during the financial crisis to conserve cash. The financial arm has been substantially downsized since then and its results have improved, with first-quarter profit more than tripling from the year-earlier period.
Still, Sherin cautioned that some uncertainty remains, such as the precise requirements for reserves under pending new financial regulations, although he voiced confidence that GE Capital will be above the thresholds.
Chief Executive Jeff Immelt told analysts that GE aims to redeem the $3 billion in preferred shares held by Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB) in the fourth quarter. GE, which sold the preferred shares to boost liquidity amid the financial crisis, had said previously that it planned to buy them back by October.
Immelt reiterated Thursday that GE will keep "a small team in place" to continue development of a second engine for the Joint Strike Fighter aircraft despite Pentagon efforts to cut the program.
"Our basic thesis remains the same," Immelt said in response to an analyst's question. "This is one of the ways to get competition [among engine developers] back in the game."
GE has been developing the F136 engine in partnership with Rolls-Royce Group PLC (RR.LN) and had lobbied fiercely to retain its role in the JSF program. However, it received a "Stop Work" order from the Pentagon four weeks ago, telling it to halt further development once funding ran out at the end of March.
U.S. defense officials want to keep the Pratt & Whitney unit of United Technologies Corp. (UTX) as the primary and sole engine provider for the aircraft.
But Immelt said Thursday that GE plans to continue some development and "see where we go in the 2012 budget cycle."
