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By Jeremy Glaser | 10-15-2010 10:12 AM

GE Starting to Play Offense

After years of defensive moves, GE is beginning to invest in growth and return more cash to shareholders, says Morningstar's Daniel Holland.

Jeremy Glaser: For, I'm Jeremy Glaser. General Electric reported third quarter results. I am here with analyst Daniel Holland to take a closer look.

Thanks for joining me, Daniel.

Daniel Holland: Thanks for having me, Jeremy.

Glaser: So how would you characterize this quarter?

Holland: Well, the results were largely in line with what we expected. You had some weakness in the revenues in the industrial side, but profitability held up pretty well.

GE Capital, again, is kind of on the mend, had a very nice profitable quarter, $832 million from continuing operations. So what you are seeing is kind of a more focused and restructured GE Capital business that I think is going to serve GE well going down the road.

Glaser: Is the company still producing a fair amount of cash?

Holland: It is. So one of the key takeaways from the call this morning was that GE is actually going to be at the high end of its cash guidance for this year at $14 billion to $15 billion of cash generation from its industrial operations, which in our opinion is pretty strong, just given the environment that GE has been operating in, it's been able to deliver in this range for some time. So, it's something I think is good to think about.

Glaser: So, with all the cash being produced, what are management plans for it?

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