Summary
General Electric (GE) in its 2018 10-K filing reported significant strategic shifts and financial challenges. The company faced a substantial net loss of $22.8 billion, largely driven by a $22.1 billion goodwill impairment charge, primarily in its Power segment, reflecting ongoing difficulties in that market. Despite a slight increase in consolidated revenues to $121.6 billion, driven by its Aviation and Oil & Gas segments, GE Industrial organic revenues saw minimal growth. The company announced significant portfolio actions, including agreements to sell its BioPharma business for $21.4 billion and the completion of its Transportation segment merger with Wabtec. These divestitures are part of a broader strategy to streamline operations and reduce leverage. The company also reduced its quarterly dividend to $0.01 per share, retaining approximately $4 billion annually. GE's new CEO, H. Lawrence Culp Jr., who took over in October 2018, is focused on improving operational execution and cost reduction across the company, particularly within the struggling Power segment. The financial results highlight the ongoing transformation efforts and the challenges faced in certain core industrial businesses.
Financial Highlights
50 data points| Revenue | $97.01B |
| Cost of Revenue | $72.82B |
| Gross Profit | $24.19B |
| R&D Expenses | $3.42B |
| SG&A Expenses | $14.64B |
| Operating Expenses | $120.32B |
| Operating Income | -$20.99B |
| Net Income | -$22.36B |
| EPS (Basic) | $-20.96 |
| EPS (Diluted) | $-20.96 |
| Shares Outstanding (Basic) | 1.09B |
| Shares Outstanding (Diluted) | 1.09B |
Key Highlights
- 1GE reported a significant net loss of $22.8 billion for the year ended December 31, 2018, largely impacted by a $22.1 billion goodwill impairment charge in the Power segment.
- 2Consolidated revenues increased by 3% to $121.6 billion, primarily driven by growth in Aviation and Oil & Gas segments, though industrial segment organic revenues saw only a slight increase.
- 3The company is actively pursuing portfolio transformations, with agreements announced for the sale of its BioPharma business for $21.4 billion and the completion of the Transportation segment merger with Wabtec.
- 4GE significantly reduced its quarterly dividend to $0.01 per share, a move intended to retain approximately $4 billion in cash annually.
- 5The Power segment continues to face significant challenges due to industry overcapacity, project execution issues, and market factors, leading to a reported segment loss of $0.8 billion.
- 6The Aviation segment demonstrated strong performance with a 13% revenue increase and a 20% profit increase, driven by strong commercial engine demand and services.
- 7GE Capital's financial services segment continued its deleveraging efforts, with total borrowings decreasing and no common dividends paid to GE in 2018.