Where General Electric Company (GE) Stands

Cost-out plan and strategic priorities

I think the restructuring program is critical for General Electric Company (NYSE:GE). The company was able to cut industrial-structural costs by $200 million in Q1, and anticipates cutting those costs by $1 billion in fiscal 2013. It continues to plan on margin growth of 70-basis points for the full year. GE Capital continued its strategy of attempting to cut the overall size of its portfolio while concentrating on core growth.

In the current challenging macro environment, the company is executing on its strategic priorities. At present, its strategic priority is an early exit from media to increase investment in its core industrial businesses. For this purpose, GE is accelerating its restructuring program. Together with its restructuring program, it is also investing in technology and in its global capabilities.

Summary

Even with the recent tough macro environment, the company is well positioned for stronger performance. General Electric Company (NYSE:GE) is executing on its strategic priorities. I expect its cost-cutting efforts will offset weakness in markets plus it has an extremely strong cash position. In 2013, the company plans to return $18 billion to shareholders through a combination of dividends and share buybacks. I believe General Electric is a strong buy for substantial profits.

The article Can GE Sustain Its Profitability Momentum? originally appeared on Fool.com and is written by siraj sarwar.

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