GENERAL ELECTRIC CO Quarterly Report for Q3 Ended Sep 30, 2010

Summary

General Electric Company (GE) reported a mixed financial performance for the third quarter of 2010. While earnings from continuing operations saw a significant year-over-year increase of 29% to $3.16 billion, translating to $0.29 per diluted share, net earnings attributable to common shareowners decreased by 18% to $1.98 billion, or $0.18 per share. This divergence was largely driven by a substantial loss of $1.1 billion from discontinued operations, primarily due to increased reserves for excess interest claims related to the GE Money Japan divestiture. Total revenues for the quarter declined by 5% to $35.9 billion, impacted by organic revenue declines, the stronger U.S. dollar, and the net effects of acquisitions and dispositions. GE Capital's segment profit improved significantly, up to $871 million from $141 million in the prior year, driven by lower provisions for losses and operating costs, although higher marks and impairments presented a headwind. The company highlighted a robust cash flow generation from its industrial segments. GE Capital continued its strategy to reduce its asset base, with collections on financing receivables exceeding originations. The company also announced a 20% increase in its quarterly dividend to $0.12 per share and extended its share repurchase program through 2013, signaling management's confidence in future performance and commitment to returning capital to shareholders. Despite challenges in certain segments, GE's overall financial position remained solid, with substantial cash and equivalents and committed credit lines.

Key Highlights

• 1Consolidated earnings from continuing operations increased 29% year-over-year to $3.16 billion in Q3 2010, with diluted EPS from continuing operations up 32% to $0.29.
• 2Net earnings attributable to common shareowners decreased 18% to $1.98 billion in Q3 2010, largely due to a $1.1 billion loss from discontinued operations (GE Money Japan reserves).
• 3Total revenues declined 5% to $35.9 billion in Q3 2010, influenced by organic revenue declines, a stronger USD, and business divestitures.
• 4GE Capital segment profit surged to $871 million from $141 million in Q3 2009, driven by lower provisions for losses and operating expenses.
• 5GE announced a 20% increase in its quarterly dividend to $0.12 per share.
• 6The company extended its share repurchase program through 2013, demonstrating confidence in future cash generation and shareholder returns.
• 7GE Capital reduced its net investment by $46.4 billion in the first nine months of 2010, primarily through collections exceeding originations.

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