Global industrial conglomerate General Electric just released its Q3 financial results.Earnings per share came in at $0.36, which is exactly what analysts expected.
However, revenue came in a little light at $36.4 billion.
“The overall environment remains challenging, but GE continues to execute on our growth strategy,” said 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.”
From the release:
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.
From the earnings release:
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 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
- 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
- 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
- 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
- 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.