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Released October 23, 2012 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Wall Street had high hopes for General Electric Company's (NYSE:GE) (GE) (Fairfield, Connecticut) third quarter financial performance. Analysts at Wall Street projected that GE's profit would increase 20.9% compared to last year. Their projections were not perfect, because GE's profits rose 7% to $3.5 billion. Analysts on Wall Street also projected that GE would have an increase of 4.1% (to 36.81 billion) in revenue from the quarter a year earlier. In reality, GE's total revenue rose 3% to $36.3 billion, so GE's financial performance was not as great as Wall Street thought it would be.
Experts from GE reported the company's third-quarter earnings in a conference call on October 19, 2012. Earnings went up 8% on improved profit margins at the conglomerate's industrial businesses; however, total orders for new equipment and services decreased. In a challenging economic environment, GE's third-quarter net income still managed to rise 49%.
In the third quarter, GE earned 33 cents per share, and this amount was up 22 cents per share from a year earlier. Total revenue was $36.3 billion. It increased 3% by $1 billion from the third quarter of 2011. According to a press release that GE published, "Industrial segment organic revenue was up 8% for the quarter and 10% year-to-date. Industrial segment growth market revenues were up 9%, excluding FX [foreign exchange], driven by double-digit growth in China, Latin America and Africa." In 2012, GE expects seven of nine growth regions to have double-digit orders growth.
The industrial segment profit increased 11% to $3.6 billion. The company also said that segment operating profits were strong in energy infrastructure, which was up 13%, and transportation, which increased 35%.
CEO Jeff Immelt summarized what's going on with various economies across the globe. He said that Europe is "tough," the U.S. had "pockets of growth" and still some uncertainty, and Asia and resource-rich regions were "OK." "Growth markets expanded by 9%, including China up 23%, Africa up 22% and Latin America up 21%. We expect six of the nine growth regions to have double-digit orders growth in 12."
Immelt also said that GE finished the quarter with $203 billion in backlog. He spoke positively about GE's industrial business. "Every industrial business had positive earnings growth for the first time since the third quarter of 2005," Immelt said. He explained that "margins are a good story." GE had expansions in every business, including energy, if you exclude the impact of the company's wind business, Immelt told audience participants.
Segment Results
GE consists of five segments: energy infrastructure, aviation, healthcare, transportation, and home and business solutions. There were increases in all of these segments. From the third quarter of 2011 to the third quarter of 2012, GE's energy infrastructure revenue was $12.2 billion. This was a 12% increase. Segment profit for energy infrastructure was $1.69 billion, and this was a 13% increase year-over-year. For the aviation segment, revenue was $4.78 billion in the third quarter, which was a 1% decrease from the third quarter of 2011. The aviation segment's profit rose 7% to $924 million since the third quarter of 2013. Revenue for the healthcare segment reached $4.3 billion; it rose 1%, and segment profit for this segment increased 2%. The transportation segment had revenue of $1.4 billion, which was a 9% year-over-year. The transportation segment's profit was $267 million in the third quarter, which was a 35% increase. In the home and business solutions segment, GE's revenue was $2.12 billion, which was a 1% increase since the second quarter of 2011. Segment profit was $61 million, which was a 61% increase since the third quarter of 2011.
Projects
There are several projects that GE either owns or is the plant parent that Industrial Info is tracking in North America and Europe. For example, In Bloomington, Indiana, GE is the plant parent of a project. GE is working with Consumer Products and Harrell Fish Mechanical Contractors to perform construction for a refrigerator manufacturing plant retool. This project has a total investment value of $161 million. GE is also the plant parent of a project that has a total investment value of $1 billion. For this project, Global Lasar Enrichment with Silex Systems Limited performs permitting for a uranium enrichment plant addition. This project is expected to kick off in the third quarter of 2013 and complete in 2015. Additionally, GE is the plant owner of a project that is worth $56 million. For this project, GE Aviation and Panattoni Construction Incorporated perform construction for a grassroot composite component manufacturing plant. This project kicked off in May 2012 and will be complete in the first quarter of 2013.
In the United Kingdom, GE is the plant owner of a project that has a total investment value of $1.58 billion. For this project, GE and Acorn Energy Developments continue preliminary engineering for a 100-MW, gas-fired, combined-cycle gas turbine generating unit. The project is expected to kick off in August 2015.
The Reorganized Energy Business
Recovery from the 2008 financial crisis continues and GE puts its best foot forward, making strategic choices to improve the company's overall profitability. This summer, Industrial Info reported that GE decided to reorganize its energy business. In the fourth quarter of this year, GE, the U.S.'s largest industrial company, will reorganize its energy business into three standalone businesses. The new businesses include: GE Power and Water, GE Oil and Gas and GE Energy Management. The challenging global economy has forced GE to make some additional changes as well. Experts from GE said that the company is on track to cut $2.8 billion this year as part of its "simplification" efforts.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Experts from GE reported the company's third-quarter earnings in a conference call on October 19, 2012. Earnings went up 8% on improved profit margins at the conglomerate's industrial businesses; however, total orders for new equipment and services decreased. In a challenging economic environment, GE's third-quarter net income still managed to rise 49%.
In the third quarter, GE earned 33 cents per share, and this amount was up 22 cents per share from a year earlier. Total revenue was $36.3 billion. It increased 3% by $1 billion from the third quarter of 2011. According to a press release that GE published, "Industrial segment organic revenue was up 8% for the quarter and 10% year-to-date. Industrial segment growth market revenues were up 9%, excluding FX [foreign exchange], driven by double-digit growth in China, Latin America and Africa." In 2012, GE expects seven of nine growth regions to have double-digit orders growth.
The industrial segment profit increased 11% to $3.6 billion. The company also said that segment operating profits were strong in energy infrastructure, which was up 13%, and transportation, which increased 35%.
CEO Jeff Immelt summarized what's going on with various economies across the globe. He said that Europe is "tough," the U.S. had "pockets of growth" and still some uncertainty, and Asia and resource-rich regions were "OK." "Growth markets expanded by 9%, including China up 23%, Africa up 22% and Latin America up 21%. We expect six of the nine growth regions to have double-digit orders growth in 12."
Immelt also said that GE finished the quarter with $203 billion in backlog. He spoke positively about GE's industrial business. "Every industrial business had positive earnings growth for the first time since the third quarter of 2005," Immelt said. He explained that "margins are a good story." GE had expansions in every business, including energy, if you exclude the impact of the company's wind business, Immelt told audience participants.
Segment Results
GE consists of five segments: energy infrastructure, aviation, healthcare, transportation, and home and business solutions. There were increases in all of these segments. From the third quarter of 2011 to the third quarter of 2012, GE's energy infrastructure revenue was $12.2 billion. This was a 12% increase. Segment profit for energy infrastructure was $1.69 billion, and this was a 13% increase year-over-year. For the aviation segment, revenue was $4.78 billion in the third quarter, which was a 1% decrease from the third quarter of 2011. The aviation segment's profit rose 7% to $924 million since the third quarter of 2013. Revenue for the healthcare segment reached $4.3 billion; it rose 1%, and segment profit for this segment increased 2%. The transportation segment had revenue of $1.4 billion, which was a 9% year-over-year. The transportation segment's profit was $267 million in the third quarter, which was a 35% increase. In the home and business solutions segment, GE's revenue was $2.12 billion, which was a 1% increase since the second quarter of 2011. Segment profit was $61 million, which was a 61% increase since the third quarter of 2011.
Projects
There are several projects that GE either owns or is the plant parent that Industrial Info is tracking in North America and Europe. For example, In Bloomington, Indiana, GE is the plant parent of a project. GE is working with Consumer Products and Harrell Fish Mechanical Contractors to perform construction for a refrigerator manufacturing plant retool. This project has a total investment value of $161 million. GE is also the plant parent of a project that has a total investment value of $1 billion. For this project, Global Lasar Enrichment with Silex Systems Limited performs permitting for a uranium enrichment plant addition. This project is expected to kick off in the third quarter of 2013 and complete in 2015. Additionally, GE is the plant owner of a project that is worth $56 million. For this project, GE Aviation and Panattoni Construction Incorporated perform construction for a grassroot composite component manufacturing plant. This project kicked off in May 2012 and will be complete in the first quarter of 2013.
In the United Kingdom, GE is the plant owner of a project that has a total investment value of $1.58 billion. For this project, GE and Acorn Energy Developments continue preliminary engineering for a 100-MW, gas-fired, combined-cycle gas turbine generating unit. The project is expected to kick off in August 2015.
The Reorganized Energy Business
Recovery from the 2008 financial crisis continues and GE puts its best foot forward, making strategic choices to improve the company's overall profitability. This summer, Industrial Info reported that GE decided to reorganize its energy business. In the fourth quarter of this year, GE, the U.S.'s largest industrial company, will reorganize its energy business into three standalone businesses. The new businesses include: GE Power and Water, GE Oil and Gas and GE Energy Management. The challenging global economy has forced GE to make some additional changes as well. Experts from GE said that the company is on track to cut $2.8 billion this year as part of its "simplification" efforts.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
