Majap Sales At GE Fall 8% In U.S. For 2nd Qtr.
By Alan Wolf -- TWICE, 7/21/2008
FAIRFIELD, CONN. — GE's major appliance sales fell 8 percent domestically during its second quarter, ended June 30.
The downturn was comprised of a 7 percent decline in retail channel sales and a 15 percent drop in its homebuilder business.
The company reported the results this morning as part of its second-quarter earnings announcement.
Sales at GE's consumer and industrial division, the operating group that includes white goods, slipped 3 percent to $3.3 billion, while profits fell 55 percent to $138 million.
GE, which has been looking to offload its majap business, announced it would seek to spin off the entire consumer and industrial unit.
The company will continue to explore all options, including a sale, spin-off or joint venture, but said it is now primarily focused on spinning off the whole unit, which also makes lighting products and integrated electrical distribution equipment and systems.
GE announced its intention to divest white goods in May after reporting disappointing first-quarter earnings. Chairman/CEO Jeff Immelt cited Haier and LG Electronics as possible suitors, but the new strategy could suggest that potential buyers aren't biting.
A spin-off would create a stand-alone company that would still be held by GE shareholders. It would also separate the conglomerate from its original business of light bulbs, which were invented by founder Thomas Edison.
"As we explored our options for appliances, it became clear that the fastest, most efficient step we could take in completing the transformation of our industrial portfolio would be to focus on a possible spin-off of the entire unit," Immelt said in a statement.
He said a package deal "makes sense for GE shareholders" as well as the unit, which has integrated processes, distribution and backroom operations. The division would also benefit by keeping its management and employees intact under president/CEO Jim Campbell, Immelt said.
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