Tuesday, January 21, 2014

GE's Profit Rises On Negative Taxes

GE had promised an increase in its profit margin and an increase in overall profits for 2013. The company did increase its profit margin, although it did not meet its target increase, but profits were aided by a tax gain of $1 billion. During the 4th quarter of 2013, GE Capital sold its Swiss operations, which generated the $1 billion tax credit. During 2013, GE Capital's tax rate was negative 14 percent. While we like the idea of negative taxes, the only way to achieve this dubious distinction is to lose money, which GE did on the sale of its Swiss operations.