GE Reports 3Q'12 Operating EPS $0.36 Industrial Segment Revenues $24.8B, +6%, Organic Growth +8%, +1
GE Reports 3Q'12 Operating EPS $0.36
Industrial Segment Revenues $24.8B, +6%, Organic Growth +8%, +10% YTD
Operating margins expand 70bps over 3Q'11
GE Capital paid $5.4B dividend YTD, CFOA of $10.7B YTD, +63%
3Q 2012 Highlights
- Tenth consecutive quarter of strong operating earnings growth
- 3Q Operating EPS of $0.36, up 50% (up 13% excluding effects of 3Q'11 preferred stock redemption)
- 3Q Continuing EPS of $0.33, up 43%
- 3Q orders up 4% ex. Wind & ex. foreign exchange (FX)
- Total Revenues of $36.3 billion, up 3%, up 6% ex. FX
- FX negatively impacted revenues by $1.1 billion
- Executing on our growth strategy
- Industrial segment organic revenues up 8%, up 10% YTD
- All Industrial segments delivered earnings growth
- Margins up 70bps over prior year period, increases in all 5 Industrial segments
- Simplification delivering sustainable cost reduction
- Expect corporate costs down to ~$2.8 billion for total year
- GE Capital earned $1.7 billion, up 11%; GECC Tier 1 common ratio 10.2%
- GE Capital 3Q ending ENI balance $425 billion, ahead of plan
- $8.4 billion returned to shareholders YTD including $3 billion buyback
- No change in company outlook; on track to deliver on double-digit earnings growth in 2012
GE [NYSE: GE] announced today third-quarter 2012 Operating Earnings of $3.8 billion, or $0.36 per share, up 10% and 50% respectively from the third quarter of 2011. Excluding the effects of the third-quarter 2011 preferred stock redemption, operating earnings per share rose 13%. GAAP earnings from continuing operations were $3.5 billion, or $0.33 per share (up 43%). Revenues were $36.3 billion for the quarter, up 3%, and up 6% excluding FX. Industrial segment revenues grew by 6%, with organic growth of 8%. The strength of GE's Industrial portfolio was evident. All Industrial segments had positive earnings growth for the first time since the third quarter of 2005; Energy Infrastructure, Transportation and Home & Business Solutions had double-digit earnings growth. The company is performing well and is on track to deliver double-digit earnings growth in 2012 for both Industrial and GE Capital segments.
"The overall environment remains challenging, but GE continues to execute on our growth strategy," said GE Chairman and CEO Jeff Immelt. "GE's Industrial segments delivered another quarter of strong organic revenue growth, and we ended the quarter with a robust backlog. As expected, our margins increased 70bps over the prior year period, with margin expansion in all five Industrial segments."
Infrastructure orders were $21.5 billion, down 5% primarily driven by a decrease in orders for wind turbines. Orders were up 4% excluding the effects of Wind and FX. Year-to-date orders were up 4%, with four out of five Infrastructure businesses showing growth. Pricing on orders was up 0.1% in total for the quarter. During the quarter, GE announced an order to supply 110 Evolution™ Series locomotive kits to Kazakhstan Temir Zholy (KTZ). GE also announced nearly $1.2 billion in commitments for its new FlexEfficiency™ 60 power generation technology for projects in the United States, Saudi Arabia and Japan. GE also signed the world's largest subsea wellhead production contract with Petrobras, worth nearly $1.1 billion.
Total revenues for the quarter were $36.3 billion, up 3%. GE's third-quarter Industrial segment revenues were $24.8 billion, up 6%. Industrial segment organic revenues were up 8% for the quarter and 10% year-to-date. Industrial segment growth market revenues were up 9%, excluding FX, driven by double-digit growth in China, Latin America, and Africa. GE expects seven of nine growth regions to have double-digit orders growth in 2012.
Industrial segment profit was up 11% to $3.6 billion and segment operating profits were strong in Energy Infrastructure and Transportation, up 13% and 35% respectively. Cash generated from GE operating activities was up 63% at $10.7 billion. GE ended the quarter with $85 billion of consolidated cash and cash equivalents.
GE Capital remains on target to become a smaller, more focused financial services business with solid earnings. GE Capital earnings grew by 11% in the quarter and ENI was $425 billion at quarter end, ahead of plan. GE Capital Corporation (GECC) returned a $2.4 billion dividend to the parent in the quarter, bringing the year-to-date total to $5.4 billion. Its Tier 1 common ratio remains strong at 10.2%.
Immelt concluded, "We are focused on delivering our key commitments to investors including balanced double-digit earnings growth, strong organic growth, margin expansion, and returning cash from GE Capital to fund balanced capital allocation for our shareholders. The global economy is uncertain, and we are prepared for a variety of economic outcomes. We will continue to invest to win in our markets, while aggressively managing our overall cost structure."
Third-quarter operating earnings were $3.8 billion, up 10% from third-quarter 2011 and operating EPS was $0.36, up 13%, excluding effects of the third-quarter 2011 preferred stock redemption. GAAP earnings from continuing operations (attributable to GE) were $3.5 billion, up 5%, or $0.33 per share, up 43% from the third quarter of 2011. A positive one-time gain of $0.03 per share was offset by $0.03 per share of restructuring and other charges.
Including the effects of discontinued operations, third-quarter net earnings attributable to GE were $3.5 billion ($0.33 per share attributable to common shareowners) in 2012 compared with $3.2 billion ($0.22 per share attributable to common shareowners) in the third quarter of 2011.
Third-quarter revenues increased 3% to $36.3 billion. Industrial sales of $24.7 billion increased 7% versus the third quarter of 2011. GECC revenues of $11.4 billion decreased 5% from last year, driven by lower assets, in-line with plan.
Cash generated from GE operating activities in the first three quarters of 2012 totaled $10.7 billion, up 63% from $6.5 billion last year. Cash generated from GE Industrial operating activities in the first three quarters of 2012 totaled $5.2 billion, down 20% from last year.
The accompanying tables include information integral to assessing the Company's financial position, operating performance and cash flow.
GE will discuss preliminary third-quarter results on a Webcast at 8:30 a.m. ET today, available at www.ge.com/investor. Related charts will be posted there prior to the call.
GE (NYS: GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works. For more information, visit the company's website at www.ge.com.
Caution Concerning Forward-Looking Statements:
This document contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: current economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets; potential market disruptions or other impacts arising in the United States or Europe from developments in the European sovereign debt situation; the impact of conditions in the financial and credit markets on the availability and cost of General Electric Capital Corporation's (GECC) funding and on our ability to reduce GECC's asset levels as planned; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; changes in Japanese consumer behavior that may affect our estimates of liability for excess interest refund claims (GE Money Japan); pending and future mortgage securitization claims and litigation in connection with WMC, which may affect our estimates of liability, including possible loss estimates; our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the adequacy of our cash flow and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level; GECC's ability to pay dividends to GE at the planned level; our ability to convert pre-order commitments into orders; the level of demand and financial performance of the major industries we serve, including, without limitation, air and rail transportation, energy generation, real estate and healthcare; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation; strategic actions, including acquisitions, joint ventures and dispositions and our success in completing announced transactions and integrating acquired businesses; the impact of potential information technology or data security breaches; and numerous other matters of national, regional and global scale, including those of a political, economic, business and competitive nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.
|GENERAL ELECTRIC COMPANY|
|Condensed Statement of Earnings|
Three Months Ended September 30
|Revenues and other income|
|Sales of goods and services||$||24,539||$||23,138||6||%||$||24,749||$||23,230||7||%||$||34||$||32||6||%|
|GECC earnings from continuing operations||-||-||1,679||1,519||-||-|
|GECC revenues from services||11,023||11,670||-||-||11,335||11,983|
|Total revenues and other income||36,349||35,364||3||%||27,246||25,370||7||%||11,369||12,015||(5||)%|
|Costs and expenses|
Cost of sales, operating and administrative expenses
|Interest and other financial charges||2,979||3,731||294||356||2,805||3,556|
Investment contracts, insurance losses and insurance annuity benefits
|Provision for losses on financing receivables||1,122||961||-||-||1,122||961|
|Total costs and expenses||32,323||31,597||2||%||23,318||21,700||7||%||9,592||10,399||(8||)%|
Earnings from continuing operations before income taxes
|Benefit (provision) for income taxes||(555||)||(437||)||(477||)||(378||)||(78||)||(59||)|
|Earnings from continuing operations||3,471||3,330||4||%||3,451||3,292||5||%||1,699||1,557||9||%|
Earnings (loss) from discontinued operations, net of taxes
Less net earnings (loss) attributable to noncontrolling interests
Net earnings attributable to the Company
|Preferred stock dividends declared||-||(881||)||-||(881||)||-||-|
Net earnings attributable to GE common shareowners
|Amounts attributable to the Company:|
|Earnings from continuing operations||$||3,454||$||3,289||5||%||$||3,454||$||3,289||5||%||$||1,679||$||1,519||11||%|
Earnings (loss) from discontinued operations, net of taxes
Net earnings attributable to the Company
Per-share amounts - earnings from continuing operations
|Diluted earnings per share||$||0.33||$||0.23||43||%|
|Basic earnings per share||$||0.33||$||0.23||43||%|
|Per-share amounts - net earnings|
|Diluted earnings per share||$||0.33||$||0.22||50||%|
|Basic earnings per share||$||0.33||$||0.22||50||%|