Sept. 25 (Bloomberg) -- General Electric Co. still has the flexibility to make acquisitions next year after shifting capital to shore up finance units and protect its AAA credit rating, the highest available, its top executives said today.

Fairfield, Connecticut-based GE has earmarked about $3 billion for non-finance acquisitions next year, concentrating in infrastructure and health-care businesses, Chief Financial Officer Keith Sherin said in an interview today. Profit from the finance businesses will be reduced to about 40 percent of GE's total next year from more than half in 2007, Sherin and Chief Executive Officer Jeffrey Immelt said today.

``We're making some steps here to strengthen the balance sheet, but we still have some flexibility here to do inorganic growth'' on the industrial side, said Sherin, 49. The company earlier this year also took advantage of buying opportunities for financial assets, including most of Merrill Lynch & Co.'s corporate finance unit in the first quarter.

GE today cut its annual forecast for the second time this year and suspended its $15 billion stock buyback. The company also said it won't raise its dividend in 2009, the first year in more than three decades with no increase, as it stockpiles capital and protects the existing payout amid volatile markets. The dividend currently yields about 4.8 percent.

``We haven't had any change in our strategy, and we're still very confident about the infrastructure segments and health care,'' Sherin said. ``Those are the target priorities for us around industrial M&A.''

Immelt Strategy

Since taking over in 2001, Immelt has shed assets for more than $55 billion in net proceeds, including its insurance companies and plastics units, while making $85 billion in purchases in faster-growing areas such as energy, aviation and health care. GE said it doesn't see a large disposition, such as splitting off GE Capital, other than those that have been announced.

``We still think over the long term this is a good business for GE to be in,'' Immelt said on company-owned network CNBC, of the remaining finance units.

The company still plans to spin off its consumer and industrial group, which includes appliances and lighting, in the first half of next year, Sherin said. GE's U.S. private-label credit card unit, with $30 billion in assets, will likely remain with GE instead of being sold as planned, GE said.

GE will more likely reduce the credit-card division by not renewing contracts and by possible divestments of parts of the portfolio, Sherin said.

``We like the portfolio. These are the businesses we've been striving to get into as a set of strategic, competitive businesses,'' Sherin said. ``There is no material change to the portfolio we're working on.''

Profit Forecast

Full-year earnings will be $1.95 to $2.10 a share instead of the previous projection of $2.20 to $2.30, GE said today. The average estimate of 14 analysts in a Bloomberg survey is $2.20 a share.

GE rose $1.09, or 4.4 percent, to $25.68 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have declined 30 percent since April 10, the day before Immelt announced a surprise drop in first-quarter profit and said 2008 profit would trail his forecast of at least $2.42 a share.

To contact the reporter on this story: Rachel Layne in Boston at rlayne@bloomberg.net

Last Updated: September 25, 2008 17:32 EDT