General Electric reported strong profit growth in the third quarter, but revenue was below expectations and investors were concerned about the company's tepid growth forecast for 2013.
On a conference call with investors Friday, CEO Jeff Immelt described a world economy that was uncertain and uneven. He said the U.S. economy was recovering slowly, and was held back by political and fiscal uncertainty.
The one major variable, he said, is the so-called fiscal cliff looming in the U.S. — the automatic tax hikes and spending cuts that will kick in at the beginning of next year unless Congress can agree on a new budget plan.
GE's size and global scope give it a unique perspective on economic growth around the world. It sells products as diverse as refrigerators, locomotives, jet engines and CT-scanners in more than 100 countries.
Immelt started the conference call with a quick overview of the major regions of the world:
"We had a good third quarter in a challenging environment," he said. "Europe is tough, Asian resource-rich countries are okay and U.S. had pockets of growth but still some uncertainty."
He was later asked by an analyst to expand on his view of the global economy.
"I think most people are assuming that the fiscal cliff gets resolved in some way, and I don't think we're alone on that one.
And then I think when I look at orders in our growth regions, we'll have six growth regions that have double-digit orders growth for the year. Six of nine. That's pretty good. That gives me some comfort. When I look at the resource-rich and rising Asia, we still see decent opportunities in China. We still see decent opportunities in the Middle East and Latin America, Russia, places like that.
"And then Europe's going to be a grind. We're not assuming that Europe gets any better.
"So I think we're looking at 2013 being kind of like 2012 with the big variable being the fiscal cliff and we're ready if it doesn't go through, but we're kind of making the same assessment most people do, that somehow it gets resolved."
- Budget, Tax & Economy
- Jeff Immelt