10-QPeriod: Q1 FY2012

GENERAL ELECTRIC CO Quarterly Report for Q1 Ended Mar 31, 2012

Filed May 4, 2012For Securities:GE

Summary

General Electric Company (GE) reported mixed financial results for the first quarter of 2012. Total revenues decreased by 8% year-over-year, primarily due to dispositions and foreign currency headwinds. However, the industrial segments showed resilience with a 7% increase in revenues, driven by organic growth and acquisitions in Energy Infrastructure. GE Capital's revenues declined, impacted by lower ending net investment and the absence of a gain from a prior year divestiture. Net earnings attributable to common shareowners saw a 10% decrease to $3.034 billion, with diluted EPS at $0.29. This decline was largely influenced by the discontinuation of certain operations and a significant reduction in 'Other income' compared to the prior year, which included a large gain from the sale of NBCUniversal. Despite the overall decrease in net earnings, the company highlighted an increase in operating earnings per share, excluding one-time items, indicating underlying operational strength. The company maintained a strong liquidity position, with substantial cash and equivalents and committed credit lines.

Financial Highlights

43 data points
Beta

Revenue

$35.08B

16.1% Gross Margin

Net Income

$3.03B

8.6% Net Margin

EPS (Diluted)

$2.32

Total Assets

$707.72B

Cash & Equivalents

$83.65B

Free Cash Flow

$3.18B

Financial Statements
Beta
Revenue$35.08B
Cost of Revenue$13.46B
Gross Profit$5.65B
Operating Expenses$31.15B
Operating Income$5.06B
Net Income$3.03B
EPS (Basic)$2.32
EPS (Diluted)$2.32

Key Highlights

  • 1Total revenues decreased 8% to $35.2 billion, influenced by dispositions and foreign exchange, though industrial segment revenues grew 7%.
  • 2Net earnings attributable to common shareowners decreased 10% to $3.034 billion ($0.29 diluted EPS), impacted by prior-year gains and discontinued operations.
  • 3GE Capital's revenues declined 12% primarily due to lower ending net investment and the absence of a significant gain from a prior year equity investment sale.
  • 4Energy Infrastructure segment revenues increased 18%, driven by acquisitions and higher volumes, particularly in Oil & Gas and Energy.
  • 5The company maintained a strong liquidity position with $83.7 billion in consolidated cash and equivalents and $51.6 billion in committed unused credit lines.
  • 6Significant disposition activity impacted revenues, with $4.6 billion lower revenues in Q1 2012 compared to Q1 2011 due to divestitures.
  • 7Other income significantly decreased to $0.6 billion from $3.6 billion due to the non-recurrence of the NBCUniversal gain.

Frequently Asked Questions

The primary drivers for the 8% decrease in total revenues were the impact of dispositions (reducing revenues by $4.6 billion) and the stronger U.S. dollar, partially offset by organic revenue growth and acquisitions.

GE Capital's revenues decreased by 12% to $11.4 billion. This was mainly due to a lower ending net investment and the absence of a significant gain from the sale of a portion of its Garanti Bank equity investment recognized in the prior year. However, excluding one-time items, GE Capital's earnings increased by 27% year-over-year.

GE maintains a strong liquidity position with consolidated cash and equivalents of $83.7 billion as of March 31, 2012. Additionally, the company has $51.6 billion in committed, unused credit lines, providing significant financial flexibility.

Yes, effective January 1, 2012, GE adopted new accounting standards related to the display of comprehensive income (ASU 2011-05) and clarifications to fair value measurements (ASU 2011-04). The adoption of ASU 2011-05 affected presentation only, while ASU 2011-04 had no impact on the financial statements.