General Electric said its profits continued to be hurt by high oil prices, which are driving up the cost of the raw materials it uses in its plastics division. The company said that it thought the potential for war in Iraq and other supply disruptions had added US$8 to US$10 to the price of a barrel of oil, currently near US$34.
"The real pressure right now is coming from raw material inflation," Sherin said. "Raw materials are pretty much out of sync with the economy."
In November, General Electric said that it would take a US$2.5 billion pre-tax charge because of unexpectedly big losses in its insurance unit. The charge would lower net income by US$1.4 billion, or US$0.14 a share, the company said at the time. It predicted earnings for all of last year, after the charge, of US$14.1 billion, or US$1.41 a share.
On Friday, the company said it had met that forecast. Its fourth-quarter earnings were $3.1 billion, or 31 cents a share, after the charge, or US$4.5 billion excluding the charge, the company said. In the year-earlier quarter, the company had net income of US$3.9 billion.
In the fourth quarter, the company's strongest units included its commercial finance division, which had a profit of US$855 million, up 30 percent from the previous year; NBC, which had a profit of US$470 million, up 14 percent; and its industrial products unit, which had a profit of US$298 million, up 15 percent.
In addition to insurance, its weakest units included its power turbine division along with its plastics division.
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