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Tickers in this Article: GE, AXP, MA
With the markets on soft ground, General Electric (NYSE:GE) reported a strong fourth quarter on Friday that gave some indication that businesses with international exposure will continue to perform well. However, with the recent worldwide sell off, the global market may not prop up these companies for long.

Generally Good
GE reported a 4% increase in net earnings to $6.69 billion from $6.44 billion a year before. This includes the effect of the company shedding its subprime lending business, which has taken substantial hits. Excluding the eliminated business, earnings from continuing operations came in at $6.8 billion for the fourth quarter from $5.9 billion a year ago, which translated to an EPS increase of 17% to 68 cents per share from 58 cents in 2006. (To learn more, see How To Evaluate The Quality Of EPS.)

The company has had trouble with its consumer finance unit in recent times, and is now looking to either find a partner in the business or possibly shop the unit for buyers. The company increased $400 million in the loss provision in the quarter for the division, and continuing areas of GE Money grew at a robust 22% for the fourth quarter. Anything tied to credit has been seeing stars recently, with both MasterCard (NYSE:MA) and American Express (NYSE:AXP) dropping nearly 20% in the last month.

GE chairman and CEO Jeff Immelt stated in the earnings press release(pdf) "We have built the company to outperform in this environment." Despite the slowing growth in the U.S., he added that GE is "more global, with more than 50% of our revenues now coming from outside the U.S."

Recession Spillover
Shares of General Electric jumped $1.10, or 3.3%, on Friday on optimism from the company's results. This was more than reversed in premarket trading on Tuesday, as part of a global sell-off. Shares of GE were down nearly 4% before the bell. The concern now is that if the U.S. enters a recession, it will cause a slowing all around the globe. This is certainly a concern for investing in the business, but nevertheless GE is well diversified and is as good as anything to have your money in during this market.

For instance, one area that will not likely drop off, even in troubled global markets, is the infrastructure segment. This was GE's strongest area, growing revenues by 30% to $17.3 billion and profits at 26% to $3.4 billion. This is an area that will continue to benefit from growth as foreign countries develop new infrastructure. GE will remain a stable business and stock throughout the tumultuous markets, but may have trouble growing profits at management's 10% rate of guidance if and global slowing is worse than anticipated. (For more tips on navigating a shaky market, see Surviving Bear Country.)

The Bottom Line
GE's quarter showed the company has taken some blows in its consumer lending business, but despite this, it showed overall strength in all of its businesses, including GE Money. The company is banking on continuing benefits from its global diversified business, but may still be hit hard if the global economy falters on the back of weakness in the U.S. I think this is still a strong company and is probably on of the safest stocks to buy moving forward.

To learn the risks and rewards of conglomerates like GE, check out Conglomerates: Cash Cows Or Corporate Chaos?

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