General Electric expects global sales to match those in the United States
GE is growing sales by 20 percent a year in some parts of the world.
NEW HAVEN, Conn. (AP) -- General Electric Co., which rode a wave of American prosperity in the last century to become one of the world's largest companies, expects its overseas sales to roughly match its domestic business this year for the first time due to rapid global growth.
The milestone by the conglomerate reflects a new reality: The fastest growth is no longer in selling appliances for the American kitchen but in building railway locomotives for China and airplane engines for India, creating solar power in Portugal, expanding electricity in Saudi Arabia and buying stakes in banks from Honduras to Bangkok.
"I think the strategy is the right one," says Robert Schenosky, an industrial analyst with Jefferies & amp; Co. in New York. "I think that's reflective of where the global economy is moving."
The Fairfield, Conn.-based industrial, financial services and media giant expects about half its revenue this year to come from overseas, up from 41 percent six years ago.
GE projects its international sales last year at 81 billion out of 164 billion total revenue, and sales are expected to grow up to 20 percent annually in developing markets such as China, India, the Middle East and Eastern Europe, compared with mid-to-high single digit percentages in the U.S. and developed markets.
"We are living in an exceptional period of time when all of these economies are growing gangbusters," GE International CEO Ferdinando Beccalli-Falco said in an interview. "The international picture at this point is particularly favorable to us."
While GE became a household name in the U.S. for its appliances, light bulbs and NBC television network, it sees growing opportunities stemming from rising consumer wealth around the world. At the same time, the company hopes to grow by addressing the world's hunger for energy and thirst for water.
GE is one of many American companies targeting China, India and other fast-growing economies. Some, such as Microsoft Corp., have struggled to make inroads, but GE believes it has the products the world needs and the reach to sell them.
"Some people think that big companies can't grow. We use our size as a basis for growth," GE Chief Executive Jeff Immelt said at last year's annual meeting. "Globalization is an area where size is an immense advantage."
GE has done business with many of the countries for decades, but sales have accelerated in recent years as the economies opened up to global trade.
"They're doing as well as anyone at this point," Schenosky said. "A company this large does need to look for new areas and extensions of business to grow earnings longer term."
GE is selling off slower-growth businesses such as insurance and plastics and focusing on faster-growth areas such as energy, oil and gas equipment, rail engines, health-care technology, finance and water-processing technology, including desalination. The company also has been trying to improve NBC's television ratings.
Western Europe, with about 39 billion in sales last year, remains the biggest chunk of overseas business. Business in China and India, which together represent 4 percent of sales, is expected to reach 8 percent by 2010.