Summary
General Electric (GE) reported its third-quarter 2016 results, showcasing continued progress in its strategic transformation, particularly with the GE Capital Exit Plan. The company's industrial businesses demonstrated resilience, with revenue growth in key segments like Power and Aviation. Significant strategic moves during the quarter included the announcement of the combination of GE's Oil & Gas business with Baker Hughes and the acquisition of LM Wind Power, signaling a continued focus on industrial growth and digital transformation. The financial services segment, GE Capital, continued its planned reduction, significantly decreasing its total assets and moving closer to completing its exit plan. This strategic divestment is a major focus for investors, aiming to streamline the business and improve financial flexibility. While the industrial segments showed positive top-line performance, the overall company performance was influenced by ongoing restructuring charges and the impact of the Alstom acquisition, which is still being integrated. Investors should monitor the successful execution of the Baker Hughes transaction and the ongoing integration of Alstom for future performance.
Financial Highlights
45 data points| Revenue | $29.27B |
| Cost of Revenue | $15.26B |
| Gross Profit | $6.39B |
| SG&A Expenses | $4.34B |
| Operating Expenses | $27.19B |
| Operating Income | $5.64B |
| Net Income | $2.03B |
| EPS (Basic) | $1.76 |
| EPS (Diluted) | $1.76 |
| Shares Outstanding (Basic) | 1.11B |
| Shares Outstanding (Diluted) | 1.13B |
Key Highlights
- 1Consolidated revenues increased by 4% to $29.3 billion, driven by a 5% increase in industrial revenues, largely due to the Alstom acquisition.
- 2GE Capital's total assets significantly decreased by 59% from $501 billion at the end of 2014 to $203 billion as of September 30, 2016, as the GE Capital Exit Plan progresses.
- 3The company announced a major strategic move to combine its Oil & Gas business with Baker Hughes, creating a new industry leader.
- 4Acquisitions in the digital and additive manufacturing space, including Meridium Inc. and the planned acquisition of Arcam AB and Concept Laser, highlight GE's focus on digital industrial capabilities.
- 5GE returned $24.5 billion to shareholders in the first nine months of 2016 through buybacks and dividends, demonstrating a commitment to capital return.
- 6Despite revenue growth in Power and Aviation, segment profit for the total industrial segment decreased by 5% due to lower earnings in Oil & Gas and Energy Connections & Lighting.
- 7The company received approval to rescind GE Capital's designation as a nonbank Systemically Important Financial Institution (SIFI), reducing regulatory oversight.