General Electric Eyes 'Very Low Tax Rate': Report (Update 1)
NEW YORK (TheStreet) -- General Electric(GE) will likely benefit from a "very low tax rate," when it reports fourth quarter earnings Jan. 18, according to a report from Bernstein Research analyst Steven Winoker.
The year "is finishing in-line with recent expectations, albeit with lower industrial organic growth and a very low tax rate for GE Capital," Winoker stated in a report published Wednesday. He added that the tax rate for GE Capital will likely be "even
GE paid a 13.8% tax rate in the third quarter, including a 4.4% rate for GE Capital, according to a previous report by Winoker.
General Electric has long been especially adept at minimizing its taxes, an issue that sparked controversy last year when The New York Times called attention to it in a front page article.
Corporate tax reform is an important part of the discussion as Congress debates over the budget in an effort to avoid the drastic series of automatic cuts known as the "fiscal cliff." General Electric CEO Jeff Immelt fielded questions about tax policy gingerly during the conglomerate's annual investor outlook meeting Monday.
"My communications guys back there are cringing right now saying be careful," Immelt told the audience after Winoker asked him what GE shareholders "should be hoping for," from Washington.
As a couple other analysts pressed the issue, Immelt eventually said that "GE along with every member really of the business round table wants corporate tax reform, that is lower the rates, takeaway deductions and give us the same basic policy that Siemens(SI) has -- every Japanese company, Rolls Royce(RR) , Toshiba, and Siemens, all have territorial. I think if you could give us that, I think that is the broad sweep."