01—Abstract
Summary
Summary of the 10-Q filed April 23, 2024. Cited figures are marked; the original filing is the authoritative source.
General Electric (GE) has completed the separation of its GE Vernova business, now operating solely as GE Aerospace.
The first quarter of 2024 reflects this transition, with total revenues reaching $16.1 billiona, an 11% increase year-over-year, driven by strong performance across all segments. Aerospace, a key segment, saw a 16% revenue increase to $8.1 billion, benefiting from robust commercial air travel and defense sector demand. While the company reported a net loss attributable to GE common shareholders of $1.5 billion for the quarter, this was largely impacted by a significant decrease in gains from sold ownership interests, particularly related to its GE HealthCare stake, and increased separation costs.
Excluding these one-time items, adjusted earnings per share were $0.82b. The company's free cash flow showed a substantial improvement, reaching $0.9 billion, up from $0.1 billion in the prior year, indicating improved operational cash generation post-separation. GE Aerospace is navigating ongoing inflationary pressures and supply chain challenges by implementing cost productivity measures and price adjustments.
The company's outlook remains positive, with continued investment in R&D for sustainable flight technologies. The financial position remains solid, with $18.4 billionc in cash, cash equivalents, and restricted cash. Looking ahead, GE Aerospace plans to return a majority of its free cash flow to shareholders through dividends and share repurchases, underscoring a commitment to shareholder value creation following its strategic transformation.
02—Key points
Key Highlights
- Completed the spin-off of GE Vernova, now operating as GE Aerospace, signifying a strategic pivot to a focused aerospace business.
- Total revenues increased 11% to $16.1 billion, driven by strong performance in the Aerospace segment, which saw a 16% revenue jump to $8.1 billion.
- Substantial improvement in Free Cash Flow (FCF) to $0.9 billion, a significant increase from $0.1 billion in the prior year.
- Reported a net loss attributable to GE common shareholders of $1.5 billion, primarily due to a substantial decrease in gains on sold ownership interests ($5.3 billion lower) and increased separation costs ($0.2 billion higher).
- Adjusted earnings per share (EPS) were $0.82, excluding certain one-time items and non-operating benefits.
- Maintains a strong liquidity position with $18.4 billion in cash, cash equivalents, and restricted cash as of March 31, 2024.
- Announced a new $15 billion share repurchase authorization, replacing the previous $3 billion authorization, signaling a commitment to returning capital to shareholders.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2024, General Electric Co kept $0.17.
- Revenue$8.96B100.0%
- Cost of revenue−$5.75B64.2%
- Gross profit$3.21B35.8%
- Operating costs−$1.69B18.8%
- Operating income$1.52B17.0%
- Interest, other & tax$17.0M0.2%
- Net income$1.54B17.2%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 23, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $8.96B$7.84B | +14.3% |
| Cost of Revenue | $5.75B$5.00B | +15.0% |
| Gross Profit | $3.21B$2.84B | +13.0% |
| R&D Expenses | $270.00M$431.00M | −37.4% |
| SG&A Expenses | $1.03B$2.14B | −52.1% |
| Operating Expenses | $7.97B$14.07B | −43.3% |
| Operating Income | $1.52B$6.25B | −75.6% |
| Net Income | $1.54B$7.51B | −79.5% |
| EPS (Basic) | $1.41$6.76 | −79.1% |
| EPS (Diluted) | $1.40$6.71 | −79.1% |
| Shares Outstanding (Basic) | 1.09B1.09B | +0.2% |
| Shares Outstanding (Diluted) | 1.10B1.10B | +0.5% |
05—Questions
Frequently Asked Questions
What is the primary impact of the GE Vernova separation on GE's financial reporting?
Following the completion of the GE Vernova separation on April 2, 2024, General Electric now operates solely as GE Aerospace. The historical results of GE Vernova's businesses (Power, Renewable Energy, and Digital) will be reported as discontinued operations beginning in the second quarter of 2024. The current report reflects GE Aerospace as the continuing entity, with prior periods presented for comparative purposes including the historical segments.
How did the gains on the sale of GE HealthCare stake affect the quarter's earnings?
The company reported a significant decrease in gains on retained and sold ownership interests, primarily related to its GE HealthCare equity position, which reduced earnings by $5.3 billion compared to the prior year. This was a major factor in the substantial year-over-year decrease in reported net earnings.
What is the outlook for GE Aerospace's core businesses?
GE Aerospace sees strong demand in both commercial aviation, driven by increasing global air travel and services, and in the defense sector, with continued government investment in fleet modernization. Supply chain disruptions and inflationary pressures are being actively managed through cost productivity initiatives and pricing adjustments. The company is also investing in R&D for sustainable flight technologies like the CFM RISE program.
What is GE Aerospace's approach to capital allocation and shareholder returns?
GE Aerospace is committed to a disciplined capital allocation strategy, including investing in growth and innovation. The company intends to return a majority of its free cash flow to shareholders through dividends and share repurchases. A new $15 billion share repurchase authorization has been announced, replacing the prior authorization, indicating a strong focus on shareholder returns.
06—Continue