What is the primary driver behind the significant decrease in GE's net earnings?

The primary driver behind the significant decrease in GE's net earnings is the substantial decline in earnings from its continuing operations, particularly within the Capital Finance segment. This downturn is largely attributable to the challenging economic environment, which has led to increased provisions for losses on financing receivables and a reduction in the overall asset base of GECS.

How is the Capital Finance segment performing, and what are the main contributing factors to its performance?

The Capital Finance segment is experiencing a severe downturn. Segment profit decreased by 87% in the third quarter and 74% year-to-date. This is primarily due to a sharp increase in provisions for losses on financing receivables, reflecting the adverse impact of the challenging economic conditions on borrowers. Additionally, a lower asset base and a lower interest rate environment have contributed to reduced revenues.

What measures is GE taking to manage its liquidity and strengthen its financial position in the current economic climate?

GE is actively managing its liquidity and financial position. Key actions include a significant reduction in its quarterly dividend, a substantial increase in its capital contribution to GECS to improve tangible capital and reduce leverage, and a strong focus on maintaining sufficient cash and committed credit lines. The company is also managing collections versus originations at GECS to support liquidity and is accessing public capital markets for funding.

How are the company's industrial segments performing relative to its financial services segment?

While the overall company performance is down, the industrial segments, specifically Energy Infrastructure and Technology Infrastructure, have shown more resilience. Energy Infrastructure saw an increase in segment profit in Q3 2009, driven by higher prices and lower costs, although revenues declined due to lower volume. Technology Infrastructure's revenues and segment profit declined, primarily due to lower volume and the stronger U.S. dollar, but its Aviation business performed relatively well.

GE 10-Q Quarterly Report Q3 FY2009 — Revenue, Net Income, EPS

Summary

General Electric (GE) reported a significant decline in financial performance for the third quarter and first nine months of 2009 compared to the same periods in 2008. Consolidated net earnings attributable to common shareholders decreased by 44% in the quarter and 43% year-to-date. This downturn was primarily driven by a substantial drop in earnings from continuing operations, particularly within the Capital Finance segment, which saw its segment profit plummet by 87% in the quarter and 74% year-to-date. Revenues across most segments also declined, reflecting challenging economic conditions, organic revenue declines, and the stronger U.S. dollar. The company has been actively managing its liquidity and balance sheet, including reducing its quarterly dividend and contributing capital to its financial services arm (GECS). Despite the downturn, GE's industrial segments, Energy Infrastructure and Technology Infrastructure, showed some resilience, with segment profit increasing in Energy Infrastructure. The company's financial services arm, GECS, experienced a sharp decrease in revenues and a significant increase in provisions for losses on financing receivables, highlighting the impact of the economic downturn on its lending activities. Nonearning receivables and the allowance for losses on financing receivables both increased substantially. Management is focused on reducing GECS asset levels and managing collections to support liquidity. GE's industrial segments are showing signs of stabilization, but the overall financial performance remains heavily impacted by the downturn in the financial services sector.

Financial Highlights

41 data points

Beta

Revenue

$12.32B

0.5% Gross Margin

Net Income

$2.49B

0.2% Net Margin

EPS (Diluted)

$1.84

Total Assets

$787.85B

Cash & Equivalents

$61.37B

Free Cash Flow

$7.04B

Financial Statements

Beta

Revenue	$12.32B
Cost of Revenue	$11.78B
Gross Profit	$6.56B
Operating Expenses	$9.35B
Operating Income	$120.00M
Net Income	$2.49B
EPS (Basic)	$1.84
EPS (Diluted)	$1.84

Key Highlights

1Consolidated net earnings attributable to GE common shareowners decreased by 44% year-over-year in Q3 2009 and 43% year-to-date.
2Earnings from continuing operations declined significantly, down 45% in Q3 and 42% year-to-date, reflecting broad economic pressures.
3The Capital Finance segment experienced a drastic reduction in segment profit, down 87% in Q3 and 74% year-to-date, due to higher provisions for losses on financing receivables and a lower asset base.
4Total revenues decreased by 20% in Q3 and 15% year-to-date, impacted by organic revenue declines, the stronger U.S. dollar, and portfolio adjustments.
5GE announced a significant reduction in its quarterly common stock dividend by 68% to $0.10 per share, effective with the second quarter dividend payable in Q3 2009, to preserve capital.
6Nonearning receivables at GECS increased to $13.8 billion (3.9% of total) from $8.0 billion (2.1%) at year-end 2008, indicating a rise in loan defaults.
7The company's liquidity remains a key focus, with $61.4 billion in cash and equivalents at September 30, 2009, and proactive measures taken to manage funding and reduce leverage.

GENERAL ELECTRIC CO Quarterly Report for Q3 Ended Sep 30, 2009

Summary

Financial Highlights

Key Highlights

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