What was the impact of the new accounting standards on GE's reported earnings?

GE adopted SFAS No. 133 (Accounting for Derivative Instruments and Hedging Activities) and EITF 99-20 (impairment accounting for retained beneficial interests) effective January 1, 2001. The adoption of SFAS No. 133 resulted in a cumulative effect of change in accounting principle of $(444) million, reducing net earnings by $0.04 per share. The adoption of EITF 99-20 resulted in an additional reduction of net earnings by $120 million ($0.01 per share). These were non-cash charges and are not expected to materially affect future results.

How did the performance of GE's industrial segments vary?

GE's industrial segments showed mixed performance. Long-cycle businesses like Power Systems (revenue up 33%, profit more than doubled) and Aircraft Engines (revenue up 12%, profit up 7%) performed strongly. However, short-cycle businesses were affected by the U.S. economic slowdown, with Appliances revenues down 5% and Industrial Products and Systems operating profit down 18% due to lower selling prices. NBC revenues declined 3% due to advertising market softness.

What is the significance of the proposed sale of GE American Communications Inc. (Americom)?

The proposed sale of GE American Communications Inc. (Americom) is a strategic move to streamline GE Capital Services' portfolio. The transaction, valued at approximately $5 billion, is expected to generate an after-tax gain of about $1 billion. GE Capital Services will retain a 25% economic interest in a newly formed holding company combining Americom and SES ASTRA's operations, allowing for continued participation in the satellite services sector.

How did GE manage its cash flow during the quarter?

GE generated $3.1 billion in operating cash flow, an 18% increase from the prior year. This robust cash generation supported $1.6 billion in dividends paid to shareholders and $0.9 billion in share repurchases under its ongoing program. GE's consolidated cash and equivalents remained stable at $8.2 billion, with GE's standalone cash and equivalents increasing to $7.5 billion.

GE 10-Q Quarterly Report Q1 FY2001 — Revenue, Net Income, EPS

Summary

General Electric Company (GE) reported a solid first quarter for 2001, demonstrating resilience despite a slowing U.S. economy. Total revenues increased by 2% to a record $30.5 billion, driven by an 11% rise in industrial business revenues, particularly in long-cycle sectors like Power Systems, Medical Systems, and Aircraft Engines. This segment's operating profit saw a double-digit increase, signaling operational strength and the benefits of initiatives like Six Sigma and digitization. GE Capital Services (GECS) also delivered strong earnings growth of 16%, buoyed by its diverse global operations in consumer services, equipment management, and specialty insurance. While GECS's total revenues saw a slight decline due to strategic exits from certain businesses, its core performance remains robust. The company also announced a significant divestiture of GE American Communications Inc. (Americom) expected to generate approximately $1 billion in after-tax gain, further optimizing its portfolio. The adoption of new accounting standards (SFAS No. 133 and EITF 99-20) resulted in non-cash charges but are not expected to materially impact future results.

Key Highlights

1Consolidated revenues reached a record $30.5 billion, up 2% year-over-year.
2GE's industrial businesses showed strong performance with an 11% revenue increase and double-digit operating profit growth, led by Power Systems and Technical Products & Services.
3GE Capital Services (GECS) earnings grew 16% year-over-year, driven by consumer services, equipment management, and specialty insurance.
4Diluted earnings per share (excluding accounting changes) were $0.30, a 15% increase from the prior year's $0.26.
5The company announced plans to sell GE American Communications Inc. (Americom) for approximately $5 billion, expected to result in a $1 billion after-tax gain.
6Operating cash flow for GE increased by 18% to $3.1 billion.
7Adoption of SFAS No. 133 (Derivative Instruments) and EITF 99-20 resulted in non-cash charges of $444 million in the quarter, reducing reported net earnings.

GENERAL ELECTRIC CO Quarterly Report for Q1 Ended Mar 31, 2001

Summary

Key Highlights

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