US major conglomerate General Electric has moved to reassure investors by stating that it will still achieve its third quarter and full year financial forecasts despite the significant impact of hurricane Katrina on its insurance arm.
In a general statement, GE chairman and CEO Jeffrey Immelt said that the company’s earnings per share forecast for the third quarter of $0.43 to $0.44 and full year 2005 earnings per share guidance of $1.80 to $1.83 remained on track
Immelt commented: We have estimated the losses at GE Insurance Solutions from the storm (Katrina) and its aftermath, and despite this impact, we are confident we will deliver on our commitment to shareholders and are reaffirming our earnings guidance for the third quarter and the year. We continue to see good fundamentals across the rest of our businesses and our earnings guidance remains consistent with prior expectations.
GE declined to specify its estimated losses from the devastating storm which cause mass flooding and destruction across Louisiana, Mississippi and Alabama.
However, other insurers experiencing major exposure have estimated losses in the region of a billion dollars. Munich Re believes the storm may cost it as much as $950 million, while AIG has predicted costs of $1.1 billion.