Will GE Explore A Spin Off?

General Electric (NYSE:GE) dropped hints that it may be exploring a spin off of GE Capital, though the company has no plans to do so, as of yet. GE Chief Executive Jeff Immelt cited the need for the occasional refresh in a company as large as GE, in Sydney.

“Our challenge is always structure and bureaucracy. Every 10 or 15 years in a company like GE you have to kind of be willing to blow it up a little bit internally and start over again,” he said. When asked about a potential spin off, Immelt said the company wasn’t currently considering it, but he’d “never say never.”

GE has been working on putting more focus on its industrial aspects and energy, while shying away from the capital and selling off its media division entirely, a move made in part to appease worried shareholders and put them at more ease amid increasing economic uncertainty. The industrialization of Asian markets has also kept demand for energy strong, while slow economic growth has remained, well, slow. Investors have started to put more emphasis on storing cash, and have trimmed back on borrowing.

GE Capital was downsized by roughly a third, to free up resources that the company moved to the more core components of the business.

Fourth-quarter operating profit at the GE Capital unit increased by 9 percent to $1.81 billion, while profit at the industrial division increased by 12 percent to $4.89 billion, according to company filings. Immelt said investors are placing a much higher value on the industrials business than the financial services unit, which he said has a ” dramatically” lower valuation than it did before the financial crisis, Nasdaq is reporting.

The company has announced that it will be cutting costs by some $2 billion, and combined with the proceeds from the sale of NBC to Comcast (NASDAQ:CMCSA) amounting to over $13 billion, GE could use the assets to finance the restructuring.

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