10-KPeriod: FY2017

GENERAL ELECTRIC CO Annual Report, Year Ended Dec 31, 2017

Filed February 23, 2018For Securities:GE

Summary

General Electric (GE) in 2017 faced significant headwinds, reporting a substantial net loss of $(6.2) billion, or $(0.72) per share, a stark contrast to the prior year's profit. This downturn was primarily driven by considerable charges and impairments, including a $6.2 billion after-tax charge related to GE Capital's insurance business, alongside restructuring costs and impairments within its industrial segments. Consolidated revenues saw a slight decrease to $122.1 billion. Despite these challenges, GE continued its strategic portfolio reshaping, completing the combination of its Oil & Gas business with Baker Hughes and selling its Water business. The company also announced plans to exit over $20 billion of assets in 2018-2019. Management acknowledged that 2017 results were below expectations, attributing the decline to softer market demands in Power, restructuring costs, and significant corporate charges, particularly related to the insurance business review. The company is focused on cost reduction, operational improvements, and strengthening its cash position for 2018.

Financial Highlights

48 data points
Beta

Revenue

$99.28B

35.2% Gross Margin

Net Income

-$8.48B

-8.5% Net Margin

EPS (Diluted)

$-8.24

Total Assets

$369.25B

Cash & Equivalents

$43.97B

Free Cash Flow

-$88.00M

Financial Statements
Beta
Revenue$99.28B
Cost of Revenue$64.33B
Gross Profit$34.95B
R&D Expenses$5.50B
SG&A Expenses$14.26B
Operating Expenses$112.71B
Operating Income-$8.25B
Net Income-$8.48B
EPS (Basic)$-8.24
EPS (Diluted)$-8.24
Shares Outstanding (Basic)1.09B
Shares Outstanding (Diluted)1.09B

Key Highlights

  • 1GE reported a net loss of $(6.2) billion for 2017, a significant reversal from a net profit of $8.2 billion in 2016, largely due to substantial charges.
  • 2The company incurred a significant after-tax charge of $6.2 billion in Q4 2017 related to its run-off insurance business, including an increase in reserves.
  • 3Consolidated revenues decreased slightly to $122.1 billion in 2017 from $123.7 billion in 2016.
  • 4GE completed the combination of its Oil & Gas business with Baker Hughes to form Baker Hughes, a GE company (BHGE) in July 2017.
  • 5The company sold its Water business for $3.1 billion, recognizing a pre-tax gain of $1.9 billion.
  • 6Significant restructuring and impairment charges were recorded, totaling $5.3 billion for 2017, impacting segments like Power and Capital.
  • 7GE announced plans to exit over $20 billion of assets in 2018-2019 as part of its ongoing portfolio review.

Frequently Asked Questions

General Electric (GE) reported a significant net loss of $(6.2) billion for the year ended December 31, 2017, compared to a net profit of $8.2 billion in 2016. This was primarily driven by substantial charges related to its run-off insurance business, restructuring costs, and impairments across various segments.

In 2017, GE completed the combination of its Oil & Gas business with Baker Hughes, forming Baker Hughes, a GE company (BHGE). The company also sold its Water business for $3.1 billion and announced plans to exit approximately $20 billion of assets in 2018-2019 as part of a broader portfolio review.

GE recorded a substantial after-tax charge of $6.2 billion in the fourth quarter of 2017 related to its run-off insurance operations, primarily due to an increase in future policy benefit reserves. Additionally, the company incurred significant restructuring and impairment charges totaling $5.3 billion.

GE's industrial segments faced mixed performance. Power revenues declined 2% with a 45% drop in segment profit due to softer market demands and inventory charges. Aviation and Healthcare showed revenue growth and improved segment profit, driven by strong demand and new products. The Oil & Gas segment's revenue increased significantly due to the Baker Hughes transaction, but core organic revenues declined. GE Capital reported substantial losses, heavily impacted by insurance-related charges and strategic actions.