Summary
General Electric (GE) reported its third-quarter 2015 results, highlighting significant progress on its strategic shift towards industrial businesses and away from its financial services arm, GE Capital. The company continued to divest assets from GE Capital as part of its announced exit plan, which is expected to be completed over the next 24 months. This strategic repositioning led to substantial after-tax charges in the period, primarily related to business dispositions, tax impacts from repatriating foreign earnings, and asset impairments. Despite these charges and the ongoing restructuring, GE's industrial segments showed resilience, with revenue and profit growth in several key areas like Aviation and Power & Water. The company also returned value to shareholders through dividends. Looking ahead, GE is focused on completing the GE Capital divestitures, integrating acquisitions, and driving growth in its core industrial operations. Investors should closely monitor the execution of the GE Capital Exit Plan, the impact of associated charges on near-term earnings, and the performance of the industrial segments as the company transitions to a more focused industrial portfolio. The exchange offer for Synchrony Financial is also a key development to watch, as it will reduce the number of outstanding GE shares.
Financial Highlights
44 data points| Revenue | $2.66B |
| Cost of Revenue | $14.20B |
| Gross Profit | $6.28B |
| SG&A Expenses | $4.26B |
| Operating Expenses | $25.98B |
| Operating Income | -$154.00M |
| Net Income | $2.51B |
| EPS (Basic) | $2.00 |
| EPS (Diluted) | $2.00 |
| Shares Outstanding (Basic) | 1.26B |
| Shares Outstanding (Diluted) | 1.27B |
Key Highlights
- 1GE is actively executing its plan to reduce the size of GE Capital by selling most of its assets, aiming to focus on its industrial businesses.
- 2The company recorded significant after-tax charges totaling $21.1 billion in the first nine months of 2015 related to the GE Capital Exit Plan, impacting reported earnings.
- 3Industrial segment revenues decreased slightly by 1% year-over-year, but organic industrial segment revenues grew by 4%, indicating underlying strength in core operations.
- 4Industrial segment profit increased by 5% for the three months ended September 30, 2015, with several segments showing improved profitability.
- 5GE Capital's segment revenues and profit saw significant declines primarily due to charges and impairments associated with the GE Capital Exit Plan.
- 6The company launched an offer to exchange GE common stock for common stock of its subsidiary, Synchrony Financial, expecting to reduce outstanding shares by 6-7%.
- 7GE Capital completed a significant debt exchange offer totaling $36 billion, aimed at restructuring its liabilities as part of the exit plan.