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Gold up 4th straight wk, Deutsche quits gold price-setting

Sunday, January 19, 2014 | 9:57 AM

London (Jan 19)   Gold rose on Friday as weakness in US equities, strong fund buying and Asian physical demand lifted bullion to its fourth consecutive weekly gain.
The market was surprised by news of Deustche Bank withdrawing from gold and silver benchmark setting, or fixing, as German regulators investigate suspected manipulation of precious metals prices by banks.
Deutsche, one of five banks involved in the twice-daily gold fix for global price setting, said Friday it was dropping out of the process after withdrawing from the bulk of its commodities business.
Gold's recent rise has been supported by a drop in equities early in 2014 following a record run-up in stocks last year. However, analysts said that a rising interest-rate environment and a better economic outlook could pressure gold.
"In the long run, we are likely to see selloffs in gold especially with more Fed tapering later this year," said Thomas Capalbo, a precious metals trader at Newedge, a brokerage in New York. Spot gold, which fell initially, climbed 0.8 percent to $1,252.11 an ounce by 2:45 p.m. EST (1945 GMT). For the week, it was up 0.5 percent, extending its weekly winning streak to four - its longest rise since September 2012. US gold futures for February delivery settled up USD 11.70 at USD 1,251.90 an ounce, with trading volume about 40 percent below its 250-day average, preliminary Reuters data showed. Gold rose on Friday against the headwinds of a stronger dollar after fresh US data supported the view the world's largest economy is improving enough to keep the Federal Reserve's stimulus-reducing measures on track.
Data showed US industrial output rose at its fastest clip in 3-1/2 years in the fourth quarter as factory activity closed out the year on a strong note, a sign of the economy's brightening prospects. PHYSICAL BUYING In China, physical gold premiums on the Shanghai Gold Exchange rose on Friday.
Buying from China, the world's biggest gold consumer, has been robust in recent weeks ahead of the Lunar New Year holiday on January 31. Among other precious metals, silver rose 1.2 percent to USD 20.29 an ounce.
Platinum group metals were supported by supply worries as members of the South Africa's Association of Mineworkers and Construction Union voted in favour of a strike over wages at the world's third-biggest platinum producer Lonmin . Platinum gained 1.7 percent to USD 1,448.99 an ounce, while palladium was up 0.5 percent to USD 743.50 an ounce.
Source : gold-eagle

Gold Up for 4th Week; 2013 vs. 2014 US Mint Bullion Sales Starts

New York (Jan 19)  Gold and silver scooped up their fourth straight week of gains and gold notably closed at a five-week high.
In bullion coin news, this week the U.S. Mint introduced its 2014 American Eagle silver coin. Its opening sales and those of the 2014 American Eagle gold bullion coins follow further below.
On Friday, gold for February delivery advanced $11.70, or 0.9%, to settle at $1,251.90 an ounce on the Comex division of the New York Mercantile Exchange. The close was gold’s highest since ending at $1,257.10 an ounce on Dec. 11. Gold prices rose $5, or 0.4%, on the week.
Gains have come even as more analysts turn bearish. In a MarketWatch article on Friday entitled "Gold contrarians say it’s time to start buying," the piece quotes Dennis Gartman, editor and publisher of The Gartman Letter:
"The analyst landscape is uncommonly bearish. Even the ‘gold bugs’ are neutral of gold and that is stunning, really." His view: it’s "time to be quietly bullish."
This week, gold tended to rise as equities and the U.S. dollar fell. The yellow metal also got a boost on Thursday when a report on U.S. inflation showed consumer prices increased in December by the most in six months, though the annual inflation level was cited by economists as tame.
Gold Outlook
Most participants forecast higher gold prices next week. The survey has been on track with accurate majority predictions since missing the first weekly gain in gold’s current streak of four.
"In the Kitco News Gold Survey, out of 33 participants, 27 responded this week. Sixteen see prices up, while eight see prices down and three see prices trading sideways or are neutral," reports Kitco.
"Several survey participants who see higher prices said they expect improving technical charts may support the yellow metal… Those who see weaker prices next week think the current rally in gold won’t last…"
Gold prices on the year are up 4.8% after dropping 28.3% in 2013 for its worst annual loss in 32 years.

Silver, Platinum and Palladium Futures

Snapping a three-session losing streak, silver for March delivery rose a quarter, or 1.3%, to close at $20.30 an ounce. Silver hit its own nearly five-week high, but on Monday at $20.39 an ounce. Silver prices finished the week stronger by 8 cents, or 0.4%.
In other precious metals futures on Friday:
  • April platinum rose $22.60, or 1.6%, to end at $1,454.10 an ounce.
  • Palladium for March delivery added $4.65, or 0.6%, to finish at $748.55 an ounce.
For the week, platinum surged 1.2% while platinum added 0.3%.
Source : gold-eagle

New York’s Schneiderman Expands Financial Crimes Unit

Photographer: Brendan Bannon/Bloomberg
New York Attorney General Eric Schneiderman’s office said yesterday that it won’t...
New York Attorney General Eric Schneiderman expanded an existing criminal bureau to include a focus on financial wrongdoing two years after Governor Andrew Cuomo created a regulator with a similar mandate.
Gary Fishman, 44, a former state prosecutor in the Manhattan District Attorney’s Office, will serve as chief of the Criminal Enforcement and Financial Crimes Bureau, an expansion of the Criminal Prosecutions Bureau, the attorney general’s office said yesterday in a statement.
“Financial industry leaders who play by the rules deserve a level playing field, and those bad actors who seek to take advantage of their competitors and their neighbors must be stopped and punished,” Schneiderman said in the statement.
New York has intensified market enforcement since the financial crisis. In 2010, Manhattan District Attorney Cyrus Vance Jr. formed a major economic crimes unit, where Fishman was principal deputy chief. This was followed by Cuomo’s 2011 merger of state insurance and banking regulators into a Department of Financial Services under Benjamin Lawsky, a top prosecutor when Cuomo was attorney general.
Schneiderman’s office said yesterday that it won’t pursue damages claims against Bank of America Corp. related to its 2009 Merrill Lynch acquisition. The attorney general is still pursuing the case without that claim, said Matt Mittenthal, a spokesman for the office. The lawsuit also seeks an injunction barring individuals from the securities industry and from serving on public boards.

Merrill Deal

The state accused Charlotte, North Carolina-based Bank of America of misleading shareholders about losses at Merrill Lynch to win approval of the $18.5 billion deal and then manipulating the federal government into contributing bailout funds from the Treasury Department’s Troubled Asset Relief Program to complete it.
Lawrence Grayson, a Bank of America spokesman, declined to comment on the New York attorney general’s decision to no longer pursue damages in the state court case.
Fishman joined Schneiderman’s office in 2012 as senior investigative counsel to the Division of Criminal Justice and led the probe of the Metropolitan Council on Jewish Poverty over the theft of charitable funds.
He served in the Manhattan D.A.’s office for more than 15 years, where he helped lead investigations into foreign financial institutions that bypass sanctions on countries including Iranthat led to deferred-prosecution agreements with Lloyds Banking Group Plc (LLOY), Credit Suisse Group AG and Barclays Plc.

‘Illicit’ Activities

The attorney general’s new bureau will focus on fighting complex financial crimes in banks and financial institutions, as well as securities and investment fraud, money laundering, mortgage fraud, investment schemes and insurance fraud. It will probe “illicit financial activities” and track the flow of suspicious funds to identify trends and help investigators, according to the statement.
Schneiderman’s office has the power to initiate criminal investigations and prosecutions on its own or at the request of the government or state agencies such as the Department of Financial Services, according to its website.
Lawsky’s department monitors about 1,900 banks and other financial institutions with assets of more than $2.9 trillion and almost 1,700 insurance companies with more than $4.2 trillion, according to its website. The department’s financial frauds division pursues civil and criminal probes.
Lawsky spent four years as the top financial crimes prosecutor under then-Attorney General Cuomo, and took part in his effort to force banks that received taxpayer bailouts to disclose information about bonus payments.
Schneiderman yesterday also announced the appointment of James G. Sheehan, 61, as head of his office’s charities bureau, which oversees not-for-profit corporations and charitable trusts.
Sheehan, now the chief integrity officer at the New York City Human Resources Administration, served as a federal prosecutor in Pennsylvania for more than 25 years, and as Medicaid inspector general for New York state from 2007 to 2011.

SAC’s Martoma Faces Doctor U.S. Says Tipped Him on Tests

The U.S. government’s key witness against Mathew Martoma testified that the former SAC Capital Advisors LP fund manager worked hard to impress and befriend him, before pressing for more and more secrets about the clinical drug trial he was working on.

Photographer: Peter Foley/Bloomberg
Former SAC Capital Advisors LP fund manager Mathew Martoma.
Sidney Gilman, 81, a former University of Michigan neurologist, testified that Martoma asked him in 2006 for confidential information about adverse reactions that showed up in the testing of bapineuzumab, a drug intended to treat Alzheimer’s disease, until he finally gave it to him.
“On that occasion I slipped and I told him the side effect,” Gilman told jurors in Martoma’s insider-trading trial in Manhattan federal court.
After that, Gilman gave Martoma detailed secret information that came to him as the chairman of the clinical trial’s safety monitoring committee, including data that was kept from Wyeth and Elan Corp., the companies that were developing the drug. The so-called Phase 2 tests were designed to determine whether bapineuzumab was safe and effective for patients with mild and moderate Alzheimer’s disease.
“That came about slowly, based on our relationship,” Gilman told jurors yesterday at the end of the first full week of the trial. “That was based primarily on our relationship.”
Prosecutors claim Martoma, 39, used confidential data about the tests from Gilman and a second doctor, New Jersey geriatrician Joel Ross, to benefit SAC by $276 million in trades of Wyeth and Elan. Martoma, who denies wrongdoing, faces as long as 20 years in prison if convicted ofsecurities fraud.

Trading Probe

Martoma is one of 83 people who have faced charges in a six-year probe by prosecutors in the office of Manhattan U.S. Attorney Preet Bharara of hedge fund managers, company insiders and expert networking firms. So far, 78 of the people charged in the probe have been convicted and none have been acquitted at trial. Six of the eight who worked at SAC have pleaded guilty and one, SAC portfolio manager Michael Steinberg, was convicted of conspiracy and securities fraud by a Manhattan federal jury last month.
In November, SAC agreed to plead guilty to securities fraud and end its investment advisory business as part of a record $1.8 billion settlement of a U.S. investigation of insider trading at theStamford, Connecticut-based firm. The accord must be approved by a judge.
SAC founder and owner Steven A. Cohen hasn’t been charged with wrongdoing.

Paid Consultations

Ross, who testified over two days at Martoma’s trial, told jurors he conducted paid consultations with Martoma, giving him secret information about the number of subjects enrolled in the trial and an adverse reaction one patient had to the drug.
Ross testified he discussed the final test results with Martoma on July 28, 2008, the day before the bapineumuzab results were to be announced publicly at a meeting of Alzheimer’s disease specialists in Chicago. Prosecutors claim Martoma already had detailed information about the results from Gilman. Ross testified he was “flabbergasted” by the amount of detail Martoma appeared to have.
Both doctors were given immunity from prosecution in return for testifying against Martoma. Gilman told jurors yesterday he agreed to forfeit the $186,000, plus interest, that he was paid by Elan for his role in the testing and by Gerson Lehrman Group Inc., which arranged the meetings with Martoma.

Share Drop

Prosecutors claim SAC sold a $700 million position in Elan and Wyeth in a few days before the disappointing bapineuzumab results caused shares of the companies to drop.
Gilman took the stand this morning, testifying that he passed illegal tips to the former fund manager.
“I revealed information that was confidential about a clinical drug trial to Mathew Martoma inappropriately,” he said.
Asked by Assistant U.S. Attorney Arlo Devlin-Brown to identify Martoma, Gilman reached for his glasses as the defendant sat with his head down. Gilman identified Martoma when he looked up at him.
Gilman, who told jurors he had planned to teach for at least five more years, said he retired in 2012 as a result of the charges against Martoma.

Gilman Retired

“I retired in November 2012 rather than being fired,” he said.
Gilman, who said he uses hearing aids, occasionally failed to hear parts of the questions he was asked. He said he hadn’t seen Martoma since the day after the public announcement of the bapineuzumab results.
Devlin-Brown showed Gilman the confidentiality provisions he had agreed to, in the guidelines for the safety monitoring committee and his contracts with Elan and Wyeth.
“My understanding was that I was not permitted to disclose any part of the safety monitoring committee,” Gilman said.
Gilman testified that Martoma flattered him and said he wanted to be friends, telling the older man about his wife and children, his parents and his family’s emigration from India.
“He was very nice, very cordial, very interested,” Gilman said of Martoma. “He seemed to understand the science quiet well.”
Gilman was favorably impressed the first time he met Martoma, at SAC’s New York offices, because Martoma had arranged for sandwiches. He testified that on a trip to Istanbul, he had forgotten he’d scheduled a phone appointment with Martoma. The fund manager told him he’d spent almost an hour on the phone trying to track him down, concerned for his welfare in a foreign country.

‘Really Touching’

“I thought that was really touching that he was worried about me, trying to find me, when I really had just forgotten about the consultation,” Gilman said.
Gilman said that from 2001 to 2012 he did hundreds of consultations, mostly with people fromhedge funds, which were arranged by Gerson Lehrman. He said he enjoyed the consultations, for which he was paid $1,000 an hour.
“It paid well. It was a diversion,” Gilman said.
In 2008, Gilman said, he made $310,000 from his job at the University of Michigan and close to $200,000 from his Gerson Lehrman consultations.
The case is U.S. v. Martoma, 12-cr-00973, U.S. District Court, Southern District of New York (Manhattan).
Soucre : Bloomberg

Morgan Stanley profit beats estimate; raises margin target

The corporate logo of financial firm Morgan Stanley is pictured on a building in San Diego, California September 24, 2013.
CREDIT: REUTERS/MIKE BLAKE

The bank's retail brokerage business, which manages money for wealthy clients, reached the company's pretax profit margin target, and Morgan Stanley raised that target for the coming years.
The results underscored how Morgan Stanley, the second largest U.S. investment bank, has retooled itself since the financial crisis. It now earns more revenues from brokerage and asset management than traditional investment banking businesses like underwriting stock offerings and trading bonds.
Its shares rose 4.5 percent to $33.46.
"We've said pretty consistently we're one step at a time management team," Chief Executive James Gorman said on a conference call, to explain gradual updates to the bank's strategic plan. Three years ago, he said, Morgan Stanley's return on equity was roughly 2 percent, and has since risen to 5 percent and then 7 percent, with a current goal of 10 percent.
The investment banking businesses, particularly bond trading, were a drag on results in the quarter, and helped pull down Morgan Stanley's profit. Net income for common shareholders in the fourth quarter fell to $133 million, or 7 cents a share, from $568 million, or 29 cents, in the same quarter in 2012.
Excluding items such as $1.2 billion in legal expenses, the bank earned 50 cents per share, according to Thomson Reuters I/B/E/S, beating the average analyst estimate of 45 cents.
The retail brokerage business generated $3.73 billion in revenue in the quarter, up from $3.33 billion a year earlier.
Income from the business rose, helped by its purchase of the 35 percent of the retail business it did not own from Citigroup Inc, its joint venture partner, in mid-2013. All of the income from the unit now goes to Morgan Stanley.
After coming close to failure during the financial crisis, Morgan Stanley beefed up its retail brokerage business by agreeing to buy Citigroup's Smith Barney unit over several years. Brokers generate relatively steady fees for the bank, and the business is much less risky than areas like bond trading, where bad bets hobbled Morgan Stanley in 2008.
In the fourth quarter, the unit delivered a pretax margin of 19 percent, or 20 percent excluding a charge. Results were helped by positive inflows and higher commissions, as well as rising markets. Morgan Stanley raised its margin targets to a range of 22 percent to 25 percent by the fourth quarter of 2015, from a prior 20 percent to 22 percent.
The increased forecast is a positive, but Morgan Stanley's wealth business has lagged major rivals on the measure. Bank of America Corp's wealth business delivered a pretax margin of 26.6 percent in the quarter.
Revenue at Morgan Stanley's investment management unit jumped 41 percent to $842 million.
TOUGH FOR INVESTMENT BANKING
Morgan Stanley's investment banking performance was more mixed. Bond trading revenue fell 14 percent to $694 million, excluding an accounting adjustment.
Revenue from fixed income and related businesses like commodities trading have been hurt across Wall Street by falling bond prices, which weigh on client volume. Citigroup and Goldman Sachs Group Inc posted similar declines in revenue, but Bank of America and JPMorgan Chase & Co managed to boost their bond trading revenue.
Speaking on a conference call with analysts, Chief Financial Officer Ruth Porat said the bond trading business was hurt by "rates" products, which typically include U.S. government debt and other bonds with interest-rate risk but little credit risk.
As with most Wall Street banks, the equities market was a bright spot for Morgan Stanley in the latest quarter.
Equities trading revenue rose to $1.5 billion from $1.4 billion, while equity underwriting revenue rose 75 percent to $416 million on an increase in both initial public offerings and secondary stock offerings.

(Reporting by Lauren Tara LaCapra in New York and Tanya Agrawal in Bangalore; Editing by Dan Wilchins, Ted Kerr and Jeffrey Benkoe)
Source : Reuters

China decries U.S. spending bill

U.S. President Barack Obama signs the ''omnibus'' spending bill in Washington January 17, 2014.
CREDIT: REUTERS/KEVIN LAMARQUE
China's Commerce Ministry has condemned a $1.1-trillion spending bill passed by the U.S. Congress last week over clauses that limit technological purchases from the Asian giant, saying they clash with the principles of fair trade.
The bill, signed by President Barack Obama on Friday, included a cyber-espionage review process for federal purchases of technology from China, a measure incorporated last year amid growing U.S. concern over Chinese cyber attacks.
In a weekend statement, China's Commerce Ministry said the move "went against the principles of fair trade" as it sought to curb purchases of Chinese technology and export of satellites and parts to China.
"China is resolutely opposed," the ministry said in comments attributed to an unnamed official in its U.S. trade division.
The bill sent a wrong message, did not aid exchanges and cooperation in the high-tech field and would have a negative effect on Chinese companies, besides harming the interests of U.S. firms, it added.
"We have noted that U.S. business groups have already made noises opposing the bill. The U.S. side should correct its mistaken ways, and create good conditions for the healthy development of Sino-U.S. trade and business cooperation."
Last year's funding legislation bars U.S. space agency NASA and the Justice and Commerce Departments from buying information technology systems without the approval of federal law enforcement officials.
That formal assessment must include "any risk associated with such system being produced, manufactured or assembled by one or more entities that are owned, directed or subsidized" by China, it says.
U.S. Representative Frank Wolf, the Republican chairman of the House Appropriations Commerce-Justice-Science subcommittee, said he directed the language to be included last year because of concerns about potential cyber threats from Chinese firms such as Huawei Technologies Co Ltd and ZTE Corp.
Wolf cited a 2012 congressional intelligence report that found such firms were closely connected to China's army, which coordinates cyber espionage against the United States.
"A slightly modified version of this language was continued again this year by bipartisan agreement with the Senate, and I believe it should be maintained and expanded to all civilian federal agencies in the year ahead," Wolf said in a statement on Friday.
U.S. curbs on foreign access to satellite technology since 1999 have effectively banned the export, re-export or transfer of this equipment or know-how to China.
The restriction followed a 1996 Chinese rocket launch accident that claimed a U.S.-manufactured satellite. In the course of the investigation, the company was accused of inadvertently transferring restricted technology to China.
But there were no new curbs on satellite exports in the latest spending bill, Kevin Wolf, a U.S. Commerce Department official, told Reuters in Washington.
"Since the late 1990s, there has been, under U.S. law, an absolute prohibition on the export and re-export to China of all satellites and related items," said Wolf, who is no relation to the congressman. "This was reconfirmed in the National Defense Authorization Act of 2013."
"The Chinese have complained about it a lot over the decades - that's not new," he said on Saturday.
China and the United States have clashed repeatedly over trade issues.

(Reporting by Ben Blanchard and Norihiko Shirouzu; Additional reporting by Doina Chiacu, Richard Cowan, David Lawder and Patricia Zengerle in WASHINGTON; Editing by Clarence Fernandez)
Source : Reuters

Deutsche Bank considers profit warning: WSJ

A Deutsche Bank sign is seen on the floor of the New York Stock Exchange January 15, 2014.
CREDIT: REUTERS/BRENDAN MCDERMID
Deutsche Bank AG (DBKGn.DE) (DB.N) is considering a profit warning as executives believe its upcoming quarterly results will be below investor expectations, the Wall Street Journal reported, citing people familiar with the matter.
The largest German bank, which is scheduled to release fourth-quarter results on January 29, suffered bigger-than-expected losses from sales of non-core assets, these people said, the Journal reported.
A profit warning would compound a series of problems that have dogged the bank over the past year, especially a lengthening list of lawsuits and regulatory matters, and redouble pressure on co-Chief Executives Anshu Jain and Juergen Fitschen to prove their turnaround plan is on track.
Deutsche Bank's spokesman Ronald Weichert declined to comment, when contacted by Reuters.
Deutsche Bank has already signaled the need to top up a 4.1 billion euro pool of litigation reserves after two major settlements in December. Litigation costs have been, up to now, expected to be the greatest drain on fourth-quarter results.
The German bank was fined $1.9 billion in December by the U.S. Federal Housing Finance Agency to settle claims it defrauded two U.S. government-controlled companies in the sale of mortgage-backed securities before the 2008 financial crisis.
It was also fined 725 million euros by EU antitrust regulators for rigging interest rates.
LIGHTENING THE LOAD
Separately, the bank has reduced assets to bolster its capital ratios, with Deutsche lightening the load at a rate of about 30-40 billion euros per quarter. Deutsche last year earmarked 250 billion euros in assets to trim from its balance sheet - some which occurred through sales and others by reducing credit lines or other accounting measures.
Any major problems with those reductions would come as a surprise to investors, for the bank has offered no indications to date that those reductions have proceeded poorly.
But Deutsche is widely expected to have suffered weaker revenue in the last quarter due to a fall-off in fixed income trading volumes, one of the bank's most important money makers and areas of strategic importance.
The bond market softened already in the third quarter of 2013 as investors braced for higher interest rates, a shift that affected trading, underwriting and investment income for Wall Street banks including Goldman Sachs (GS.N).
Industry wide, bond trading has come under pressure due to new regulations that restrict activities such as proprietary trading and others that make it more expensive for banks to trade or hold securities on their balance sheets.
Analysts on average expect the bank to earn 0.48 euros (65 cents) on revenue of 7.55 billion euros ($10.24 billion) in the fourth quarter, according to Thomson Reuters I/B/E/S/.
Deutsche Bank's U.S.-listed shares closed down 3 percent at $52.27 on Friday on the New York Stock Exchange.
($1 = 0.74 euros)

(Reporting by Avik Das in Bangalore and Thomas Atkins in Frankfurt; Editing by Kirti Pandey and Chris Reese)
Source : reuters

GE profit margins fall short, shares slide

General view of General Electric GEnx-747 jet engine before a test at the GE Aviation Peebles Test Operations Facility in Peebles, Ohio, November 15, 2013.
CREDIT: REUTERS/MATT SULLIVAN
General Electric Co (GE.N) posted disappointing 2013 profit margins on Friday, hurt by delayed wind turbine deliveries and poor energy management results, offsetting a 5 percent rise in quarterly earnings.
Strength from sales of oil pumps and jet engines helped the U.S. conglomerate match Wall Street expectations for fourth-quarter profit of 53 cents per share, excluding items.
But shares dipped 2.6 percent as it came up slightly short of its 2013 goal for expanding profit margins at its industrials businesses, which the company is increasingly focusing on as it reduces its exposure to the volatile financial sector.
"This was an important target they had been putting in front of investors for a long time," said Christian Mayes, an analyst at Edward Jones, who has a "hold" rating on GE.
"The transition is continuing to take time and GE is going to really have to hit these targets, and it's disappointing they couldn't quite get it done on the industrial target this year."
GE expanded its operating margin for its industrials businesses by 0.66 of a percentage point, below its full-year target of a 0.7 percentage point improvement.
GE's Chief Financial Officer Jeff Bornstein told Reuters in an interview the margin shortfall was "absolutely negligible, given the size of the company."
"Execution-wise, we like the momentum we have behind us and but for a couple of issues in the quarter, it really wouldn't have been much of a discussion," Bornstein said.
The diversified manufacturer said its quarterly net earnings rose to $4.2 billion, or 41 cents per share, from $4.01 billion, or 38 cents a share, a year earlier.
Its 53 cents per share quarterly profit, excluding items, was in line with the average expectation of analysts, according to Thomson Reuters I/B/E/S.
"They make a lot of big stuff, and when you sell a lot of big things it's easier for things to slip on a quarter-by-quarter basis and have a dramatic effect on margins," said Jack Degan, chief investment officer at Harbor Advisory Corp.
"On a year-over-year basis, their margins are moving in the right direction," said Degan, whose company owns GE shares.
The conglomerate said its cost cuts were ahead of plan for 2013, and it would seek to reduce costs by at least another $1 billion in 2014.
"Cost cuts are how they really made the quarter here," said Tim Ghriskey, chief investment officer of Solaris Asset Management, which owns GE shares. "But at some point, cost cuts are going to run out."
GE shares fell 2.6 percent in afternoon trading to $26.48, against a broadly flat market. The stock outperformed in 2013 when it rallied more than 30 percent.
OIL BOOST
GE, a bellwether for the economy because of its size and diversity, reported that six of its seven industrial segments grew earnings.
"We saw good conditions in growth markets, strength in the U.S., and a mixed environment in Europe," Chief Executive Officer Jeff Immelt said in a statement.
Revenue rose 3.1 percent to $40.38 billion, about $160 million ahead of analysts' targets.
Revenue at its oil and gas business - its fourth largest, but fastest growing segment in 2013 - jumped 17 percent, while revenue in aviation, its second-biggest segment, increased 13 percent.
Ghriskey said the revenue growth was "reflecting very much a GDP type of growth rate, and nothing above that."
Results in its largest segment, power and water, were hurt by an issue with the manufacture of blades for wind turbines.
The company did not ship 200 turbines as expected in the fourth quarter, and now expects to do so in early 2014.
The supply chain issue weighed on profits and margins in the fourth quarter.
"Wind has been one of the laggards for the portfolio for the last couple of years,"Morningstar analyst Daniel Holland said.
Profit in its smaller energy management unit fell 28 percent, although the segment is a relatively small contributor to overall earnings.
GE's backlog of orders for everything from oil pumps to jet engines and turbines rose 16 percent to $244 billion, a record.
CFO Bornstein said the backlog gave the company confidence it would reach its goal of increasing revenue in 2014 by 4 percent to 7 percent for its industrial businesses, excluding acquisitions.

(Reporting by Lewis Krauskopf and Ernest Scheyder; Editing by Sophie Hares)
Soucre : reuters.com

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