GE's Messy First Quarter: What to Expect

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NEW YORK (TheStreet) -- General Electric's first-quarter earnings report will be a messy one, and that's a good thing.

The company in February announced it would accelerate the sale of its remaining 49% stake in NBCUniversal to Comcast for $12 billion in cash, $4 billion in Comcast debt, and "$0.7 billion of preferred stock in a holding company controlled by Comcast whose sole asset is its interests in NBCUniversal."

GE's first-quarter results will also include the sale of office space at 30 Rockefeller Plaza in New York to Comcast for $1.4 billion in cash.

GE CFO Keith Sherin said during a conference call on Feb. 12, "GE will realize a $1 billion pretax gain on the 49% sale and GE Capital will realize a $900 million pretax gain on the real estate sale." Sherin said the company would be paying $3.2 billion in "cash taxes."

GE ended 2012 with $77 billion in cash and cash equivalents. Sherin said during the Feb. 12 call the NBCUniversal deal with increase the company's cash by roughly $13.5 billion, after tax.

When discussing the deal with Comcast, General Electric CEO Jeff Immelt was upbeat, as usual, saying during the call that "we don't expect any earnings dilution from the loss of NBC earnings in 2013 and 2014."


Even more important for investors was Immelt's statement that the exit from NBCUniversal would "increase and accelerate the buyback" of common shares. "Our Board has authorized an increase to our buyback from the existing $25 billion to $35 billion through 2015. As of today, we have about $23 billion remaining and our plan is to buy back approximately $10 billion worth of stock this year alone."

GE continues to make moves to support its goals of growing its energy business and increasing its percentage of revenue from industrial operations. The company on April 8 agreed to purchase oil drilling equipment manufacturer Lufkin Industries for $3.3 billion in cash.

First-Quarter Preview

GE reports its first-quarter results early Friday morning, with a consensus earnings estimate of 35 cents a share among analysts polled by Thomson Reuters, but increasing from 34 cents in the first quarter of 2012.