The Key to GE's Growth

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In today's world, most companies span several regions and sell across the world. As Foolish colleague Morgan Housel notes, 10 years ago, less than a third of S&P 500 revenue growth came from abroad. Today, that area makes up half of the S&P 500's growth.

And that number is growing. The truth is, investors regularly underestimate how much demand comes from abroad. More importantly, for large, multinational corporations that have already established a presence in their home markets, much of their future growth comes from abroad.

With that in mind, today we're looking at General Electric (NYS: GE) . We'll examine not only where its sales and earnings come from, but how its sales abroad have changed over time.


Where General Electric's sales were four years ago
Four years ago, General Electric produced 50% of its sales within the United States.

anImage

Source: S&P Capital IQ.

Source: S&P Capital IQ.

Where General Electric's sales are today
Today, the United States continues growing as a contributor to General Electric's sales. However, that's not because sales are booming, but rather because sales have slipped globally.

anImage

Source: S&P Capital IQ.

Source: S&P Capital IQ.

Segment

Sales Growth

United States(19%)
Europe(27%)
Pacific Basin6%
Americas5%
Middle East and Africa23%
Other Global(45%)

The main segment driving back sales was GE's Capital unit, which saw sales slip from nearly $68 billion in 2008 to around $46 billion last year. In addition, the company spun off its NBC Universal segment to new majority owner Comcast (NAS: CMCSA) , which put additional downward pressure on U.S. sales.

General Electric's main sales opportunities increasingly look to come from segments such as its Energy Infrastructure sector, which grew 16% last year. Within that segment, there's no shortage of international growth prospects. Even though GE's growth doesn't look impressive, emerging markets could well end up being the key to the company's growth in the coming decade.

Keep searching for global opportunities
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At the time this article was published Eric Bleekerowns shares of no companies listed above. The Motley Fool has adisclosure policy.
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