• EPS of .30, up 15%; earnings of $3.3 billion, up 14%
• Company revenues of $37.4 billion, down 4%
• Total company orders of $19.2 billion, up 8%; equipment orders up 17%
• GE Capital losses have peaked and earnings are rebounding
• Industrial cash flow from operations at $6.3 billion YTD
• $74 billion consolidated cash and equivalents
• Industrial margins strong at 17.1%, up 70 bps from 2Q ’09
GE announced today second-quarter 2010 earnings from continuing operations (attributable to GE) of $3.3 billion, with EPS of .30 per share up 15% from the second quarter of 2009. Revenues were $37.4 billion for the quarter, down 4% from a year ago, impacted by lower GE Capital assets, industrial dispositions and lower equipment sales as expected.
“GE’s economic environment continues to improve,” GE Chairman and CEO Jeff Immelt said, citing growth in orders, margins and earnings amid other encouraging signs in the quarter. “Equipment orders increased 17%, including 20% growth in the Energy Infrastructure segment and 14% at Technology Infrastructure. Oil & Gas and Healthcare orders were particular bright spots and helped hold total company orders backlog roughly flat, excluding the impact of foreign exchange.
“GE’s portfolio generated solid results across the board,” Immelt said. “Our Energy and Technology Infrastructure businesses performed as expected, Home & Business Solutions and NBCU turned in good revenue and earnings growth, and GE Capital delivered 93% net income growth as losses have peaked and earnings are rebounding.
“Higher income and lower losses at GE Capital were particularly encouraging, with pre-tax earnings of .7 billion,” Immelt said. “We continue to see improvement in key performance measurements. Losses and impairments declined .5 billion from the prior quarter, with consumer losses down .4 billion and real estate losses in line with our expectations. We have strengthened the franchise over the past year and GE Capital’s earnings recovery should continue.
“The company advanced strategically in the quarter. We announced that our joint venture with China Aviation Industry Corporation (AVIC) has been selected to provide the avionics systems package for the newly launched C919 single-aisle aircraft. The C919 is now positioned to have the most GE content of any plane in history. We announced the launch of our global GE Healthcare Performance Solutions business to expand consulting capabilities that help customers reduce waste and improve efficiency. And GE Capital recently announced the disposition of BAC Credomatic, consistent with our overall strategy to bring ending net investment to targeted levels.
“Company execution was strong in the quarter,” Immelt said. “Industrial margins improved to 17.1%, up 70 bps from a year ago. We continued to invest for future growth and increased our first-half R&D investment by 14%. Cash generated from Industrial operating activities totaled $3.8 billion in the quarter and we are on track for $13-$15 billion this year. At quarter-end, GE had $74 billion of consolidated cash and equivalents.”
Positive items were offset by charges in the quarter. After-tax gains of .01 per share were offset by .01 per share in after-tax restructuring and other charges.
“GE is well positioned across the portfolio, both financially and competitively,” Immelt said. “The company continues to generate strong cash flow, which we will invest strategically to create shareholder value, while keeping the company safe. We expect to grow earnings and dividends in 2011 and beyond.”
Second-Quarter 2010 Financial Highlights:
Earnings from continuing operations attributable to GE were $3.3 billion, up 14% from $2.9 billion in the second quarter of 2009. EPS from continuing operations was .30, up 15% from last year. Segment profit increased 8% compared with the second quarter of 2009, as 93% growth at GE Capital, 13% growth at NBC Universal and 59% growth at Home & Business Solutions, more than offset an 11% earnings decline at Technology Infrastructure.
Including the effects of discontinued operations, second quarter net earnings attributable to GE were $3.1 billion (.28 per share attributable to common shareowners) in 2010 compared with $2.7 billion (.25 per share attributable to common shareowners) in the second quarter of 2009.
Revenues decreased 4% to $37.4 billion. GE Capital Services’ (GECS) revenues fell 2% versus last year to $13.1 billion. Industrial sales were $24.4 billion, down 6% from the second quarter of 2009.
Cash generated from GE Industrial operating activities in the first six months of 2010 totaled $6.3 billion, down 10% from $7.0 billion last year.
The accompanying tables include information integral to assessing the company’s financial position, operating performance and cash flow.
GE will discuss preliminary second-quarter results on a Webcast at 8:30 am ET today, available at ge.com/investors. Related charts will be posted there prior to the Webcast.
GE (ge.com) is a diversified infrastructure, finance and media company taking on the world’s toughest challenges. From aircraft engines and power generation to financial services, health care solutions, and television programming, GE operates in more than 100 countries and employs about 300,000 people worldwide.
Caution Concerning Forward-Looking Statements:
This document contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: current economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets; the impact of conditions in the financial and credit markets on the availability and cost of General Electric Capital Corporation’s (GECC) funding and on our ability to reduce GECC’s asset levels as planned; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the adequacy of our cash flow and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level; the level of demand and financial performance of the major industries we serve, including, without limitation, air and rail transportation, energy generation, network television, real estate and healthcare; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation; strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses; and numerous other matters of national, regional and global scale, including those of a political, economic, business and competitive nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.
Press Contact: Anne Eisele, GE - P: 1 203 373 3061, M: +1 203 522 9045, E: anne.eisele[.]ge.com.