10-QPeriod: Q1 FY2011

GENERAL ELECTRIC CO Quarterly Report for Q1 Ended Mar 31, 2011

Filed May 6, 2011For Securities:GE

Summary

General Electric Company (GE) reported a strong first quarter for 2011, with net earnings attributable to the Company increasing significantly to $3.43 billion, up from $1.95 billion in the prior year's quarter. This growth was driven by a robust performance across its industrial segments and a substantial gain from the disposition of its NBC Universal (NBCU) business. Total revenues rose by 6% to $38.4 billion, reflecting organic growth, the impact of acquisitions and dispositions, and a weaker U.S. dollar. GE Capital's revenues also saw a modest increase, supported by improved margins and a gain from the sale of its Garanti Bank equity investment. The company's industrial segments, including Energy Infrastructure, Aviation, Healthcare, and Transportation, all demonstrated positive revenue growth. Notably, Energy Infrastructure revenues grew by 9%, driven by higher volumes, while Healthcare saw a 10% increase in revenues due to higher volume in both equipment and services. GE Capital's net earnings saw a significant improvement, largely due to lower provisions for losses on financing receivables and the aforementioned gain on the Garanti Bank transaction. Despite the overall positive results, the company continued its strategic initiative to reduce its net investment in GE Capital.

Financial Highlights

43 data points
Beta

Revenue

$13.04B

40.4% Gross Margin

Net Income

$3.43B

26.3% Net Margin

EPS (Diluted)

$2.48

Total Assets

$727.84B

Cash & Equivalents

$82.17B

Free Cash Flow

$4.53B

Financial Statements
Beta
Revenue$13.04B
Cost of Revenue$11.82B
Gross Profit$5.27B
Operating Expenses$30.89B
Operating Income$4.77B
Net Income$3.43B
EPS (Basic)$2.56
EPS (Diluted)$2.48

Key Highlights

  • 1Net earnings attributable to GE common shareowners surged by 80% to $3.36 billion, with diluted EPS rising to $0.31 from $0.17 in the prior year.
  • 2Total consolidated revenues increased by 6% to $38.4 billion, driven by organic growth across segments and a gain from the NBC Universal disposition.
  • 3Energy Infrastructure segment revenues grew by 9% to $9.45 billion, primarily due to higher volumes.
  • 4GE Capital's segment profit saw a substantial increase of $1.26 billion to $1.84 billion, driven by lower loss provisions and the gain on the Garanti Bank equity investment sale.
  • 5The company successfully completed significant acquisitions, including Dresser, Inc. and Wellstream PLC, further strengthening its Energy Infrastructure segment.
  • 6GE continued its strategy to reduce its net investment in GE Capital, with the segment's net investment decreasing from $476 billion to $461 billion during the quarter.
  • 7Consolidated assets decreased by $23.4 billion, largely due to the NBC Universal disposition and a reduction in financing receivables, while consolidated liabilities also decreased by $25.0 billion, reflecting a net reduction in borrowings.

Frequently Asked Questions

The significant increase in net earnings was primarily driven by the substantial gain realized from the disposition of the NBC Universal (NBCU) business, coupled with strong operational performance across GE's industrial segments and improved profitability within GE Capital, largely due to reduced provisions for losses on financing receivables.

The disposition of NBC Universal resulted in a significant pre-tax gain of $3.6 billion and a corresponding income tax expense of $3.2 billion. This transaction also led to a deconsolidation of NBCU and its reporting under the equity method. The financial results for the quarter reflect the gain and the associated tax impact, as well as a reduction in revenues from NBCU operations due to its deconsolidation.

GE Capital continued its strategy to reduce its net investment during the quarter. The ending net investment in GE Capital, excluding cash and equivalents, decreased from $476 billion at December 31, 2010, to $461 billion at March 31, 2011. This reduction was achieved through a decrease in financing receivables and overall asset levels.

Yes, GE completed significant acquisitions during the quarter, including Dresser Inc. for $3.2 billion and Wellstream PLC for $1.3 billion. These acquisitions are primarily within the Energy Infrastructure segment and are expected to enhance GE's competitiveness in key industries.