By Alwyn Scott
(Reuters) - General Electric Co <GE.N> is seeking a sharp cut in corporate tax rates under President Donald Trump but is bracing for U.S. sales of medical equipment to suffer if Congress delays changing U.S. healthcare laws.
"From a GE perspective, at a minimum, we need to have a corporate tax system where the rate of taxation is commensurate with the OECD average of 21 or 22 percent," down from 35 percent, GE Chief Financial Officer Jeff Bornstein told Reuters, referring to the Organization for Economic Cooperation and Development. "We at least need to be on a par."
- All of these celebrities have had their nudes leaked 35 Pictures
- PHOTOS: Apple Emoji update includes a llama, skateboard and some bagel drama 24 Pictures
The Boston-based industrial conglomerate, which makes more than half of its sales overseas, also wants companies to be taxed in countries where they earn money and not taxed again when earnings are returned to the United States. When companies repatriate foreign earnings, they should be taxed at 4 to 5 percent, Bornstein said.
GE anticipates that delays in the U.S. Congress repealing and replacing Obamacare could dent its sales, but it does not expect to cut prices to spur sales, Bornstein added.
The comments came as GE, a maker of power plants, aircraft engines, locomotives and medical equipment, posted a 36 percent profit jump but said industrial division sales fell in the final quarter of 2016, sending its shares down.
Analysts questioned whether slow fourth-quarter growth in organic revenue, which excludes acquisitions, could mean GE will miss the 2017 target of 3 to 5 percent growth that it affirmed on Friday.
Organic revenue in industrial businesses fell 1 percent in the quarter, below GE's zero to 2 percent forecast. GE explained that revenue at its power plant unit was hit by failure to ship six gas turbines to Bahrain and Iraq that it expected to deliver in the quarter. Revenue in the unit still rose 20 percent, boosted by the Alstom business GE acquired last year.
With Alstom revenue included, as it will be in future quarters, hitting the revenue target "doesn't look like a stretch," said Deane Dray, analyst at RBC Capital Markets.
In fact, he added, investors may have sold GE shares on Friday and bought more volatile industrial stocks on the view that GE's growth target implies stronger growth in 2017.
Revenue in GE's oil-and-gas business, which sells products for exploration and production, fell 22 percent, but weak market conditions meant that decline was expected.
Noting GE's overall organic revenue rose 4 percent in the fourth quarter, Chief Executive Officer Jeffrey Immelt said the 2017 target was achievable. "I feel pretty secure," he said on a conference call with analysts.
GE shares were off 2 percent at $30.61 in afternoon trading.
GE said total revenue fell 2.4 percent to $33.1 billion, slightly below Wall Street expectations of $33.6 billion.
Net income from continuing operations attributable to GE shareholders rose to $3.48 billion, or 39 cents a share, from $2.57 billion, or 26 cents a share, a year earlier.
Excluding special items, earnings fell 2 percent to 46 cents a share, matching the analysts' average estimate compiled by Thomson Reuters I/B/E/S.
(Additional reporting by Ankit Ajmera in Bengaluru; Editing by Lisa Von Ahn and Cynthia Osterman)