Summary
General Electric (GE) reported flat consolidated revenues of $23.4 billion for the third quarter of 2019 compared to the prior year. However, industrial segment organic revenues showed a healthy 7% increase, driven by strong performance in Aviation, Renewable Energy, and Healthcare, partially offset by the Power segment. The company continued its significant portfolio transformation, notably deconsolidating Baker Hughes and recording an $8.7 billion loss in discontinued operations, while also completing the spin-off of its Transportation segment. GE highlighted efforts to improve its financial position, including a tender offer to repurchase $4.8 billion of debt. However, a $1.0 billion pre-tax charge related to an insurance premium deficiency test in GE Capital, along with continued challenges in the Power segment and a $744 million goodwill impairment in Renewable Energy, impacted overall profitability. Investors should monitor the ongoing execution of GE's industrial segments, especially the recovery in Power, and the company's progress in reducing its debt and simplifying its financial services operations.
Financial Highlights
45 data points| Revenue | $23.36B |
| Cost of Revenue | $17.33B |
| Gross Profit | $6.03B |
| SG&A Expenses | $3.29B |
| Operating Expenses | $24.77B |
| Operating Income | -$437.00M |
| Net Income | -$9.42B |
| EPS (Basic) | $-8.64 |
| EPS (Diluted) | $-8.64 |
| Shares Outstanding (Basic) | 1.09B |
| Shares Outstanding (Diluted) | 1.09B |
Key Highlights
- 1Consolidated revenues remained flat at $23.4 billion, but industrial segment organic revenues increased by 7%, demonstrating underlying operational strength.
- 2Significant corporate restructuring continues, including the deconsolidation of Baker Hughes, resulting in an $8.7 billion loss in discontinued operations for Q3 2019.
- 3The Power segment experienced a 14% revenue decline and continued operational challenges, though management noted early signs of stabilization.
- 4Aviation and Healthcare segments showed solid growth, with Aviation orders up 8% and Healthcare revenues up 5% year-over-year.
- 5Renewable Energy revenues increased by 13%, driven by wind turbine demand, but segment profit declined due to higher losses in Grid Solutions and Hydro businesses.
- 6GE Capital incurred a $1.0 billion pre-tax charge related to an insurance premium deficiency test, impacting its profitability.
- 7GE Industrial Free Cash Flow (FCF) for the nine months ended September 30, 2019, was negative at $(1.6) billion, showing a deterioration compared to $(0.3) billion in the prior year.