Tales of Innovation II: General Electric

With one year EPS of $1.55, and strong financials coming from sales in aerospace, transportation, electronics, consumer and industrial appliances and lighting, medical equipment, advanced materials, infrastructure including water and automation, amazingly GE (NYSE: GE) is one of the largest financial companies in the US providing commercial finance, consumer finance, insurance services, and equipment management. This company is not the result of some smart guys surfing the Internet bubble, but accounts for 124 years of innovation supported by leaders that run from Thomas Edison to Jack Welch who took over as CEO in 1981. Admittedly, we must say that Welch is responsible for what the company is today, as he crafted the strategy to drive the business from industrials into services. GE has $134 billion on revenues (54% Europe, 24% pacific basin, 13% Americas), $15 billion net earnings, $647 billion in assets with $55 billion coming from intangible assets including goodwill from acquisitions, R&D expenditures are around $2.7 billion, 218,000 employees. GE focus on innovation promises lots of things, including products that we would never notice, such as water treatment technologies, the polycarbonate Lexan resin which is probably protecting your cell phone, and the GE90 the most powerful engine ever built (Guinness Book 2002: with 127,900 pounds of thrust) that is used on the new Boeing 777, which is ready to flight this year.