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General Electric Co, USA
COMPANY PROFILE
General Electric Co, USA Profile
General Electric is a diversified technology and financial services company. The company is structured into seven industrial operating segments, in addition to its financial services segment GE Capital. The industrial segments are: Power & Water; Oil & Gas, Energy Management; Aviation; Healthcare; Transportation; and, Appliances & Lighting. Pumps are part of the Power & Water and Oil & Gas segments. GE recently announced plans to sell most of its GE Capital assets over the next 24 months and focus on continued investment and growth in its industrial businesses. Analysis
General Electric (GE) posted revenues of US$148.6 billion in fiscal 2014, up 1.7% on a year earlier. Revenues from its Industrial segments were up 6.1% on fiscal 2013 at US$109.9 billion, with organic growth of 7%. In its Power & Water division sales were US$27.6 billion, up 11.5% on a year earlier. The increase came from higher volumes, primarily higher equipment sales in its Power Generation Products & Services (PGP) and Renewables business units, partially offset by lower prices in both these divisions as well as the impact of a stronger US dollar. In GE’s Oil & Gas segment, revenues of US$18.7 billion were up 10.0% on the 2013 figure. The increase reflected higher volume, mainly driven by higher equipment sales at Subsea Systems, Drilling & Surface and Turbomachinery Solutions. GE’s total segment profit was US$24.8 billion, up 2.5% on a year earlier. The associated margin rose to 16.2% from 15.7% in the prior year. For Power & Water, segment profit was US$5.4 billion, an increase of 7.2% on the 2013 comparator, reflecting higher volumes at PGP and Renewables and higher productivity delivering a 10% reduction in selling, general & administrative costs. This was partially offset by a less favourable business mix with equipment revenue up 20% and lower prices. In the Oil & Gas segment, profit increased 19.0% to US$2.6 billion, attributed to higher productivity, volume and prices. GE’s earnings from continuing operations in 2014 rose 1.1% on the previous year to US$15.3 billion, while its net earnings were up 16.7% on the 2013 comparator at US$15.2 billion. The company finished the year with a record backlog of US$261 billion. Total employees fell approximately 0.7% to finish the year at a total of 305 000. GE made a number of acquisitions and disposals during the year, the most significant of which was an agreement to purchase Alstom’s Power & Grid business.
COMMENT During fiscal 2014 GE continued with its strategy to reposition the company as a more focused, high-value industrial company. In the past decade, this quest has seen the firm complete more than US$100 billion of acquisitions and divestments. This has included major investments to strengthen its infrastructure portfolio, a substantial reduction in its financial services operations and the disposal of businesses where it believes it lacks a competitive advantage. Three key events furthered these efforts in 2014. In May, GE announced an agreement for the acquisition of Alstom’s Power & Grid business, the largest in the company’s history. This strategic investment brings complementary products and services that GE believes will greatly strengthen its position in this sector. In July 2014, the company began the spin-off of Synchrony Financial, its retail finance business. In September 2014, GE announced the sale of its Appliances business to Electrolux for US$3.3 billion. GE’s goal is to be ‘the world’s best infrastructure company, with a valuable specialty finance business.’ It plans to build on those sectors where it believes it holds a competitive advantage that include power, healthcare, aviation, water, transportation, and, oil & gas. With plans to sell most of its GE Capital assets over the next 24 months, GE expects that by 2018 more than 90% of its earnings will be generated by its industrial businesses. ■
Key Figures (US million) General Electric Co
Year ended 31.12 2012
2014
2013
2011
2010
148 589
146 045
146 684
146 542
148 875
109 902
103 602
102 811
95 225
85 216
27 564 18 676
24 724 16 975
28 299 15 241
25 675 13 608
24 779 9433
Segment Profit Of Which: Industrial Segments Of Which: Power & Water Oil & Gas
24 783
24 180
22 708
20 548
17 213
17 764
16 220
15 486
14 068
14 130
5352 2585
4992 2178
5422 1924
5021 1660
5804 1406
Earnings from Continuing Operations
15 345
15 177
14 624
14 122
12 577
Net Earnings
15 233
13 057
13 641
14 151
11 644
305 000
307 000
305 000
301 000
273 000
Consolidated Revenues Of Which: Industrial Segments Of Which: Power & Water Oil & Gas
Number of Employees Contact Details
Chair and CEO: Address:
6
Pump Industry Analyst
Jeff Immelt 3135 Easton Turnpike Fairfield, CT 06828-0002, USA
Tel: +1 203 373 2211 Web: www.ge.com
April 2015
General Electric Co, USA Profile
General Electric is a diversified technology and financial services company. The company is structured into seven industrial operating segments, in addition to its financial services segment GE Capital. The industrial segments are: Power & Water; Oil & Gas, Energy Management; Aviation; Healthcare; Transportation; and, Appliances & Lighting. Pumps are part of the Power & Water and Oil & Gas segments. GE recently announced plans to sell most of its GE Capital assets over the next 24 months and focus on continued investment and growth in its industrial businesses. Analysis
General Electric (GE) posted revenues of US$148.6 billion in fiscal 2014, up 1.7% on a year earlier. Revenues from its Industrial segments were up 6.1% on fiscal 2013 at US$109.9 billion, with organic growth of 7%. In its Power & Water division sales were US$27.6 billion, up 11.5% on a year earlier. The increase came from higher volumes, primarily higher equipment sales in its Power Generation Products & Services (PGP) and Renewables business units, partially offset by lower prices in both these divisions as well as the impact of a stronger US dollar. In GE’s Oil & Gas segment, revenues of US$18.7 billion were up 10.0% on the 2013 figure. The increase reflected higher volume, mainly driven by higher equipment sales at Subsea Systems, Drilling & Surface and Turbomachinery Solutions. GE’s total segment profit was US$24.8 billion, up 2.5% on a year earlier. The associated margin rose to 16.2% from 15.7% in the prior year. For Power & Water, segment profit was US$5.4 billion, an increase of 7.2% on the 2013 comparator, reflecting higher volumes at PGP and Renewables and higher productivity delivering a 10% reduction in selling, general & administrative costs. This was partially offset by a less favourable business mix with equipment revenue up 20% and lower prices. In the Oil & Gas segment, profit increased 19.0% to US$2.6 billion, attributed to higher productivity, volume and prices. GE’s earnings from continuing operations in 2014 rose 1.1% on the previous year to US$15.3 billion, while its net earnings were up 16.7% on the 2013 comparator at US$15.2 billion. The company finished the year with a record backlog of US$261 billion. Total employees fell approximately 0.7% to finish the year at a total of 305 000. GE made a number of acquisitions and disposals during the year, the most significant of which was an agreement to purchase Alstom’s Power & Grid business.
COMMENT During fiscal 2014 GE continued with its strategy to reposition the company as a more focused, high-value industrial company. In the past decade, this quest has seen the firm complete more than US$100 billion of acquisitions and divestments. This has included major investments to strengthen its infrastructure portfolio, a substantial reduction in its financial services operations and the disposal of businesses where it believes it lacks a competitive advantage. Three key events furthered these efforts in 2014. In May, GE announced an agreement for the acquisition of Alstom’s Power & Grid business, the largest in the company’s history. This strategic investment brings complementary products and services that GE believes will greatly strengthen its position in this sector. In July 2014, the company began the spin-off of Synchrony Financial, its retail finance business. In September 2014, GE announced the sale of its Appliances business to Electrolux for US$3.3 billion. GE’s goal is to be ‘the world’s best infrastructure company, with a valuable specialty finance business.’ It plans to build on those sectors where it believes it holds a competitive advantage that include power, healthcare, aviation, water, transportation, and, oil & gas. With plans to sell most of its GE Capital assets over the next 24 months, GE expects that by 2018 more than 90% of its earnings will be generated by its industrial businesses. ■
Key Figures (US million) General Electric Co
Year ended 31.12 2012
2014
2013
2011
2010
148 589
146 045
146 684
146 542
148 875
109 902
103 602
102 811
95 225
85 216
27 564 18 676
24 724 16 975
28 299 15 241
25 675 13 608
24 779 9433
Segment Profit Of Which: Industrial Segments Of Which: Power & Water Oil & Gas
24 783
24 180
22 708
20 548
17 213
17 764
16 220
15 486
14 068
14 130
5352 2585
4992 2178
5422 1924
5021 1660
5804 1406
Earnings from Continuing Operations
15 345
15 177
14 624
14 122
12 577
Net Earnings
15 233
13 057
13 641
14 151
11 644
305 000
307 000
305 000
301 000
273 000
Consolidated Revenues Of Which: Industrial Segments Of Which: Power & Water Oil & Gas
Number of Employees Contact Details
Chair and CEO: Address:
6
Pump Industry Analyst
Jeff Immelt 3135 Easton Turnpike Fairfield, CT 06828-0002, USA
Tel: +1 203 373 2211 Web: www.ge.com
April 2015