How did the September 11th events impact GE's third quarter results?

The September 11th events resulted in approximately $400 million in insurance losses for GE, impacting both the consolidated results and specifically GE Capital Services (GECS). Without these losses, GE's earnings per share would have grown by 16% instead of the reported 3%.

What is the performance of GE's core industrial businesses?

GE's ongoing Industrial revenues increased by 10% in the third quarter, driven by strong performance in long-cycle businesses, which grew by 28%. This indicates resilience and growth in GE's core industrial operations despite broader economic concerns.

How is GE Capital Services (GECS) performing, aside from the September 11th impact?

Excluding the September 11th insurance losses, GECS earnings would have increased by 15% in the third quarter. This growth was fueled by a 7% increase in assets to $391 billion and effective cost reduction measures, with eleven of its businesses achieving double-digit earnings growth.

What accounting changes are noted in the report, and what is their impact?

The report mentions the adoption of SFAS No. 133 (Accounting for Derivative Instruments and Hedging Activities) and EITF 99-20 (impairment accounting for retained beneficial interests). The adoption of SFAS No. 133 resulted in a cumulative effect on net earnings of $(444) million and on equity of $(827) million. The adoption of EITF 99-20 resulted in a $120 million reduction in net earnings. Management stated these accounting changes are non-cash and are expected to have a modest impact on future results.

GE 10-Q Quarterly Report Q3 FY2001 — Revenue, Net Income, EPS

Summary

General Electric Company (GE) reported its third quarter 2001 results, demonstrating resilience despite significant challenges, including the September 11th terrorist attacks. For the quarter ended September 30, 2001, GE's net earnings were $3.281 billion, an increase of 3% from the prior year's $3.180 billion. Diluted earnings per share rose to $0.33 from $0.32. Revenues showed a nominal decline of 8% to $29.5 billion, impacted by strategic repositioning at GE Capital Services (GECS), the prior year's Olympics, and a September 11th-related reinsurance premium. However, on a comparable basis, revenues increased by 7%, with ongoing Industrial revenues up 10%, driven by strong performance in long-cycle businesses. For the nine months ended September 30, 2001, net earnings reached $9.751 billion, up from $9.150 billion in the same period last year, with diluted EPS growing to $0.97 from $0.91, excluding the impact of accounting changes. The company highlighted strong operational execution, including Six Sigma quality and digitization initiatives, contributing to improved operating margins and significant cost savings. GE Capital Services, despite facing $400 million in insurance losses due to the September 11th events, managed to achieve an overall improvement in earnings driven by asset growth and cost reductions.

Key Highlights

1Third quarter net earnings increased by 3% to $3.281 billion, with diluted EPS growing to $0.33.
2Consolidated revenues decreased by 8% to $29.5 billion, but comparable revenues grew by 7%, driven by a 10% increase in ongoing Industrial revenues.
3GE Capital Services (GECS) incurred $400 million in insurance losses due to the September 11th events, yet reported a 12% decrease in quarterly earnings to $1.301 billion (a 15% increase excluding losses).
4For the nine months ended September 30, 2001, net earnings were $9.751 billion, up 6% year-over-year, with diluted EPS at $0.97 (excluding accounting changes).
5The company continues to benefit from its Six Sigma quality and digitization initiatives, generating $1.2 billion in digitization savings through September.
6Power Systems segment showed significant strength with a 43% revenue increase and a 94% operating profit increase in the third quarter.
7GE accelerated its stock repurchase program, buying back $832 million in shares during the quarter.

GENERAL ELECTRIC CO Quarterly Report for Q3 Ended Sep 30, 2001

Summary

Key Highlights

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