Monday, May 05, 2008
GE LEAVING THE CONSUMER LENDING BUSINESS
NEW YORK (AP) -- Shares of recreational vehicle makers traded mostly lower Monday afternoon as an analyst said GE Money's plan to leave the consumer RV and marine lending business will put further pressure on a sector already dealing with weakening economic conditions.
"The decision is yet another in a string of developments -- diminishing home values, higher gas prices, weaker consumer confidence -- that has 2008 on pace to be the worst year since 1992," Craig Kennison of Robert W. Baird & Co. wrote in a client note.
The analyst said GE Money, a division of General Electric Co., plans to cut ties with Thor Industries Inc.'s finance unit, Thor Credit. The subsidiary added $1.5 million in referral fees to the company's bottom line last year. Kennison said Thor will look to team up with another financial institution, as it has previously partnered with Bank of Boston and E-Trade Financial Corp.
While GE Money may look to create a similar business at another bank, Kennison predicts such a move could take months.
Shares of Thor Industries fell $1.21, or 4.4 percent, to $26.24 in afternoon trading, while Winnebago Industries Inc.'s stock dropped 30 cents, or 2 percent, to $14.96.
Shares of Monaco Coach Corp. slid 25 cents, or 4.2 percent, to $5.65 after hitting a fresh 52-week low of $5.50 earlier. Elsewhere in the sector, Fleetwood Enterprises Inc. was down 5 cents at $3.44.
"The decision is yet another in a string of developments -- diminishing home values, higher gas prices, weaker consumer confidence -- that has 2008 on pace to be the worst year since 1992," Craig Kennison of Robert W. Baird & Co. wrote in a client note.
The analyst said GE Money, a division of General Electric Co., plans to cut ties with Thor Industries Inc.'s finance unit, Thor Credit. The subsidiary added $1.5 million in referral fees to the company's bottom line last year. Kennison said Thor will look to team up with another financial institution, as it has previously partnered with Bank of Boston and E-Trade Financial Corp.
While GE Money may look to create a similar business at another bank, Kennison predicts such a move could take months.
Shares of Thor Industries fell $1.21, or 4.4 percent, to $26.24 in afternoon trading, while Winnebago Industries Inc.'s stock dropped 30 cents, or 2 percent, to $14.96.
Shares of Monaco Coach Corp. slid 25 cents, or 4.2 percent, to $5.65 after hitting a fresh 52-week low of $5.50 earlier. Elsewhere in the sector, Fleetwood Enterprises Inc. was down 5 cents at $3.44.
