GE announced July 16 second-quarter 2010 earnings from continuing operations (attributable to GE) of $3.3 billion, with earnings per share of .30 per share up 15 percent from the second quarter of 2009. Revenues were $37.4 billion for the quarter, down 4 percent from a year ago, impacted by lower GE Capital assets, industrial dispositions and lower equipment sales as expected.
“GE’s economic environment continues to improve,” GE Chairman and CEO Jeff Immelt said, citing growth in orders, margins and earnings amid other encouraging signs in the quarter. “Equipment orders increased 17 percent, including 20 percent growth in the Energy Infrastructure segment and 14 percent at Technology Infrastructure. Oil & Gas and Healthcare orders were particular bright spots and helped hold total company orders backlog roughly flat, excluding the impact of foreign exchange.
“GE’s portfolio generated solid results across the board,” Immelt said. “Our Energy and Technology Infrastructure businesses performed as expected, Home & Business Solutions and NBCU turned in good revenue and earnings growth, and GE Capital delivered 93 percent net income growth as losses have peaked and earnings are rebounding.
“Higher income and lower losses at GE Capital were particularly encouraging, with pre-tax earnings of $0.7 billion,” Immelt said. “We continue to see improvement in key performance measurements. Losses and impairments declined $0.5 billion from the prior quarter, with consumer losses down .4 billion and real estate losses in line with our expectations. We have strengthened the franchise over the past year and GE Capital’s earnings recovery should continue.
“The company advanced strategically in the quarter. We announced that our joint venture with China Aviation Industry Corporation (AVIC) has been selected to provide the avionics systems package for the newly launched C919 single-aisle aircraft. The C919 is now positioned to have the most GE content of any plane in history. We announced the launch of our global GE Healthcare Performance Solutions business to expand consulting capabilities that help customers reduce waste and improve efficiency. And GE Capital recently announced the disposition of BAC Credomatic, consistent with our overall strategy to bring ending net investment to targeted levels.
“Company execution was strong in the quarter,” Immelt said. “Industrial margins improved to 17.1 percent, up 70 bps from a year ago. We continued to invest for future growth and increased our first-half R&D investment by 14 percent. Cash generated from Industrial operating activities totaled $3.8 billion in the quarter and we are on track for $13-$15 billion this year. At quarter-end, GE had $74 billion of consolidated cash and equivalents.”
Positive items were offset by charges in the quarter. After-tax gains of .01 per share were offset by .01 per share in after-tax restructuring and other charges.
“GE is well positioned across the portfolio, both financially and competitively,” Immelt said. “The company continues to generate strong cash flow, which we will invest strategically to create shareholder value, while keeping the company safe. We expect to grow earnings and dividends in 2011 and beyond.”
