Global conglomerate General Electric Co. cut its 2002 earnings forecast, said it would take charges totaling U.S. $1.4 billion at its money-losing reinsurance unit, and signaled that 2003 profit would be softer than previously thought. GE also said it would raise its quarterly dividend 6 percent.
In a widely expected move, the Fairfield, CT, U.S.-based company said it would take a charge of $1.4 billion after taxes as it moves to shore up reserves at Employers Reinsurance Corp. GE said it would contribute $1.8 billion to shore up ERC's reserves.
GE also said it would contribute $4.5 billion to GE Capital to reduce its debt leverage. GE cut its 2002 earnings forecast to $1.51 a share from $1.65.
For 2003, GE said it expects earnings to range between $1.55 and $1.70 a share. Analysts had been expecting the company to unveil the charges and ratchet back expectations for next year because of weakness in such industrial businesses as aircraft engines, plastics, and power systems. (Reuters)
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