Summary
General Electric Company (GE) in 2019 continued its strategic transformation, focusing on streamlining its portfolio and improving operational execution. The company reported consolidated revenues of $95.2 billion, a slight decrease from the previous year, primarily due to declines in GE Capital revenues and corporate items, while its industrial segments showed growth. Significant portfolio actions included the spin-off of the Transportation segment and the agreement to sell the BioPharma business within Healthcare. Despite ongoing challenges in the Power segment, GE's Aviation and Healthcare segments demonstrated solid performance, driving industrial segment organic revenue growth. Financially, GE reported a net loss of $5.4 billion attributable to common shareholders, impacted by significant charges including an $8.7 billion loss on the deconsolidation of Baker Hughes and a $1.0 billion pre-tax charge related to an insurance premium deficiency. However, continuing operations saw a reduction in losses compared to the prior year, largely due to lower goodwill impairment charges. GE also focused on strengthening its balance sheet through debt reduction, ending the year with $47.9 billion in GE Industrial net debt.
Financial Highlights
55 data points| Revenue | $90.22B |
| Cost of Revenue | $66.91B |
| Gross Profit | $23.31B |
| R&D Expenses | $3.12B |
| SG&A Expenses | $13.81B |
| Operating Expenses | $92.75B |
| Operating Income | -$613.00M |
| Net Income | -$4.98B |
| EPS (Basic) | $-4.99 |
| EPS (Diluted) | $-4.99 |
| Shares Outstanding (Basic) | 1.09B |
| Shares Outstanding (Diluted) | 1.09B |
Key Highlights
- 1Consolidated revenues were $95.2 billion, a 2% decrease year-over-year, primarily driven by GE Capital and corporate items. Industrial segment organic revenues increased by 5.5%.
- 2GE Industrial segment profit increased by 8% year-over-year, with positive contributions from Power, Healthcare, and Aviation segments, partially offset by Renewable Energy.
- 3Significant portfolio actions included the spin-off of the Transportation segment to Wabtec (generating $6.2 billion in proceeds) and the agreement to sell the BioPharma business for approximately $21.4 billion, expected to close in Q1 2020.
- 4The Aviation segment continued to be a strong performer, with revenues up 8% driven by commercial aftermarket earnings and long-term service agreements. However, the grounding of the Boeing 737 MAX impacted GE's cash flow from operating activities by approximately $1.4 billion.
- 5The Power segment experienced a 16% revenue decline and a segment profit improvement of $1.2 billion, driven by cost productivity and absence of significant 2018 charges, but orders decreased significantly.
- 6GE reported a net loss attributable to common shareholders of $5.4 billion. Continuing operations loss attributable to common shareholders was $44 million, an improvement from a loss of $21.4 billion in the prior year, largely due to a significant reduction in goodwill impairment charges.
- 7GE generated $2.3 billion in GE Industrial free cash flow for the year, a decrease from $4.3 billion in the prior year, primarily due to higher working capital usage.