10-QPeriod: Q2 FY2011

GENERAL ELECTRIC CO Quarterly Report for Q2 Ended Jun 30, 2011

Filed July 29, 2011For Securities:GE

Summary

General Electric (GE) reported solid financial results for the second quarter and the first six months of 2011, demonstrating sequential improvement across several key metrics. The company saw an increase in earnings from continuing operations attributable to the Company, driven by stronger performance in its industrial segments, particularly Aviation and Transportation, as well as improved profitability in GE Capital. Revenues saw a slight overall decline, largely due to the disposition of NBC Universal, but excluding this, organic revenue growth was positive across industrial segments, supported by increased volumes and the weaker U.S. dollar. The company's financial services arm, GECS, also showed signs of stabilization, with lower provisions for losses on financing receivables and improved delinquency rates, although asset levels continued to decline as part of a strategic reduction. GE's industrial businesses, excluding the impact of acquisitions and dispositions, showed resilience with increased volumes and positive contributions from services. The company continues to focus on operational efficiency and cost containment. While the financial services segment is undergoing a strategic reduction in asset levels, its profitability has improved, driven by better credit quality and lower provisioning. The company's liquidity remains strong, with ample cash and equivalents and committed credit lines, providing a solid foundation for future operations and investments.

Financial Highlights

43 data points
Beta

Revenue

$12.44B

44.1% Gross Margin

Net Income

$3.76B

30.3% Net Margin

EPS (Diluted)

$2.80

Total Assets

$739.13B

Cash & Equivalents

$91.05B

Free Cash Flow

$4.08B

Financial Statements
Beta
Revenue$12.44B
Cost of Revenue$12.95B
Gross Profit$5.49B
Operating Expenses$31.09B
Operating Income$5.12B
Net Income$3.76B
EPS (Basic)$2.80
EPS (Diluted)$2.80

Key Highlights

  • 1Earnings from continuing operations attributable to the Company increased by 10% in Q2 2011 and 26% in the first six months of 2011 compared to the prior year periods.
  • 2Industrial segments, excluding the impact of acquisitions and dispositions, showed revenue growth, driven by higher volumes and services, with Aviation and Transportation performing particularly well.
  • 3GE Capital's net earnings saw a significant improvement, primarily due to lower provisions for losses on financing receivables and improved credit quality.
  • 4The company successfully completed the disposition of NBC Universal, generating significant cash and a remaining equity interest.
  • 5Consolidated revenues saw a slight decrease, primarily due to the NBCU disposition, but industrial sales excluding dispositions showed organic growth.
  • 6Cash flow from operating activities for GE's industrial businesses remained robust, while GECS continued to manage its asset levels and funding sources effectively.
  • 7The company maintained a strong liquidity position with substantial cash and equivalents and available credit lines.

Frequently Asked Questions

GE demonstrated improved financial performance. Earnings from continuing operations attributable to the Company increased by 10% in the second quarter and 26% in the first six months of 2011 compared to the same periods in 2010. This improvement was driven by stronger industrial segment performance and increased profitability in GE Capital, despite an overall slight decrease in consolidated revenues primarily due to the NBCUniversal disposition.

The disposition of NBC Universal led to a reduction in consolidated revenues but generated significant cash proceeds and a remaining equity interest. While the disposition reduced segment revenues for "Corporate items and eliminations," it contributed to a pre-tax gain in the first six months of 2011. The overall financial statements reflect the impact of this major transaction.

GE Capital (GECS) showed signs of stabilization and improved profitability. This was driven by lower provisions for losses on financing receivables, indicating better credit quality and delinquency rates. The company is strategically reducing its asset levels within GE Capital, and despite this reduction, the segment's earnings performance has improved, supported by effective risk management and a more stable credit environment.

GE maintains a strong liquidity position, with substantial cash and equivalents totaling $91.1 billion at June 30, 2011. The company also has access to committed, unused credit lines totaling $53.7 billion. GE Capital (GECS) continues to manage its funding through various sources including commercial paper, term debt, deposits, and collections on its financing receivables, aligning with its strategy to reduce net investment in GE Capital.