Summary
General Electric (GE) reported its second quarter 2017 financial results, reflecting a period of significant strategic shifts and operational adjustments. The company's consolidated revenues decreased by 12% year-over-year to $29.6 billion, impacted by the prior year's gain from the Appliances business sale and a 12% decline in Financial Services revenues. Industrial segment revenues saw a modest 2% decrease, though organic industrial revenue growth remained positive at 2% for the quarter. The company announced a leadership transition with Jeffrey Immelt set to retire as CEO, succeeded by John L. Flannery. GE is actively executing its GE Capital Exit Plan, which is reducing the size of its financial services businesses. This is reflected in the significant decrease in Financial Services revenues and losses. The company also completed the creation of Baker Hughes, a GE company, in July 2017. Despite a challenging quarter in certain industrial segments like Oil & Gas and Energy Connections & Lighting, the Aviation and Healthcare segments showed strength with revenue and profit growth. The company remains focused on cost reduction and operational efficiency as it navigates its portfolio transformation.
Financial Highlights
46 data points| Revenue | $29.10B |
| Cost of Revenue | $15.50B |
| Gross Profit | $13.60B |
| SG&A Expenses | $4.15B |
| Operating Expenses | $28.30B |
| Operating Income | $1.15B |
| Net Income | $1.06B |
| EPS (Basic) | $0.80 |
| EPS (Diluted) | $0.80 |
| Shares Outstanding (Basic) | 1.08B |
| Shares Outstanding (Diluted) | 1.09B |
Key Highlights
- 1Consolidated revenues declined 12% to $29.6 billion, largely due to the prior year's gain from the Appliances business sale and a 12% decrease in Financial Services revenue.
- 2Industrial segment revenues decreased 2% to $28.0 billion, with organic industrial revenue growth of 2% reported for the quarter.
- 3Financial Services segment reported a loss of $0.17 billion, a significant improvement from a loss of $0.60 billion in the prior year, attributed to cost reductions from the GE Capital Exit Plan.
- 4The company completed the combination of its Oil & Gas business with Baker Hughes, forming 'Baker Hughes, a GE company' (BHGE), in which GE holds a 62.5% interest.
- 5Leadership transition announced: Jeffrey R. Immelt to retire as CEO, succeeded by John L. Flannery.
- 6Aviation and Healthcare segments demonstrated resilience, with Aviation revenues flat but segment profit up 11%, and Healthcare revenues up 4% with segment profit up 6%.
- 7Energy Connections & Lighting segment saw a significant revenue decline of 27% due to the prior year's Appliances disposition and lower GE Lighting revenues.