GE (GE) Higher After Maintaining That GE Capital Will Be Profitable In Q1 and FY09, Sees No Need For External Capital

Shares of General Electric (NYSE: GE) are 7% higher in pre-open trading as the company is hosting a investor meeting about its embattled GE Capital unit. GE is maintaining the view that GE Capital will be profitable in Q1 and for the full year and also said it does not foresee a need for external capital even under stress assumptions.

CFO Keith Sherin said, "Even in this difficult environment of credit pressure and declining asset values, we expect GE Capital Finance to be profitable in the first quarter and full year 2009. Our funding position is strong, having already completed 93% of 2009 funding goal."

GE Vice Chairman & GE Capital Chairman and CEO Mike Neal said "We have a strong set of financial services businesses built with discipline, sound risk management and a conservative, originate-to-hold model. We expect these businesses to perform through this difficult cycle. We have sufficient capital and alternatives to weather the tough environment."

"To give our investors further assurance and recognizing the uncertainty of the current climate, we have stress tested GE Capital Finance using assumptions consistent with the Federal Reserve's base case and a more severe adverse case, which contemplates unemployment peaking at 10% and GDP declining by more than 3% in 2009. Even under this more severe case, which would potentially cause our losses and impairments to increase significantly, GE Capital Finance would still essentially break even and not require additional capital." Neal continued.

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