Summary
General Electric (GE) reported its first quarter 2018 results, showing a mixed performance across its diverse segments. The company experienced a 7% increase in consolidated revenues, driven by a 9% rise in its industrial segments, largely attributed to the Baker Hughes acquisition and favorable foreign currency movements. However, organic industrial segment revenues declined by 4%, primarily due to softer demand in the Power and Oil & Gas sectors. The Aviation and Healthcare segments demonstrated resilience with revenue growth. Financially, GE reported a consolidated loss from continuing operations, though adjusted earnings per share saw an improvement. A significant development was the recording of a $1.5 billion reserve in discontinued operations related to the U.S. Department of Justice's investigation into WMC and GE Capital. The company's liquidity position remained a focus, with GE Capital no longer expected to issue incremental senior unsecured term debt until 2020. Moody's changed its outlook on GE and GE Capital to negative, affirming existing ratings, while S&P and Fitch ratings remained unchanged.
Financial Highlights
46 data points| Revenue | $27.79B |
| Cost of Revenue | $20.91B |
| Gross Profit | $6.88B |
| SG&A Expenses | $4.09B |
| Operating Expenses | $27.72B |
| Operating Income | $261.00M |
| Net Income | -$1.15B |
| EPS (Basic) | $-1.12 |
| EPS (Diluted) | $-1.12 |
| Shares Outstanding (Basic) | 1.09B |
| Shares Outstanding (Diluted) | 1.09B |
Key Highlights
- 1Consolidated revenues increased by 7% to $28.7 billion, driven by a 9% increase in industrial segment revenues, which reached $27.4 billion.
- 2Organic industrial segment revenues declined by 4%, with notable weakness in the Power (-9%) and Oil & Gas (-7% if excluding Baker Hughes contribution) segments, though Aviation (+7%) and Healthcare (+9%) showed growth.
- 3The company recorded a $1.5 billion reserve in discontinued operations related to the U.S. Department of Justice's investigation into WMC and GE Capital.
- 4GE Industrial segment profit decreased by 5% to $2.7 billion, impacted by lower results in Power and Oil & Gas, despite improvements in Aviation and Healthcare.
- 5GE Capital revenues decreased by 19% to $2.2 billion, contributing to an increase in overall financial services losses.
- 6GE CFOA (Cash From Operating Activities) was negative $1.0 billion, a decrease from $0.4 billion in the prior year, largely due to a $2.0 billion decrease in dividends from GE Capital.
- 7Moody's Investors Service changed its outlook for GE and GE Capital to negative from stable, while affirming their credit ratings.