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General Electric (GE) reported third-quarter earnings today of $4.68 billion, or 44 cents a share. That was inline with analysts’ expectations. Last year, GE earned $4.07 billion, or 38 cents a share. Sales rose 9% to $41.93 billion.

It’s almost hard to explain how big GE is. There’s no conglomerate quite like it. The company is almost its own country. For the third quarter, the GDP of the U.S. economy will probably be around $3.2 trillion. That means that GE makes up roughly 1/700th of our total economy. For every $700 you earn a year, GE makes, on average, a $1 profit off you. The route may be long and winding, but your money reaches GE eventually.

Despite its size and wealth, GE’s stock has not been a winner this decade. The shares got as high as $32 during the summer of 1998, only $2 below where they are now. In the last days of the 1990s, GE was trading over 50 times earnings. Today, the stock is going for about 19 times earnings, and the dividend currently yields about 2.6%.

I’d still shy away from GE, but it may soon be a good buy.

Posted by edelfenbein at October 14, 2005 1:36 PM