Positioned to deliver on 2021 commitments and long-term profitable growth
- Total orders $17.0B, (13)%; organic orders (8)%
- Total revenues (GAAP) $17.1B, (12)%; Industrial organic revenues* $16.0B, (10)%
- Industrial profit margin (GAAP) of 2.3%, (3,260) bps; adjusted Industrial profit margin* 5.1%, (40) bps, +110 bps organically
- Continuing EPS (GAAP) of $0.00, $(0.70); adjusted EPS* $0.03, +$0.01
- GE Industrial CFOA (GAAP) $(0.5)B, +$1.2B; GE Industrial free cash flow* $(0.8)B, +$1.7B, excluding BioPharma
BOSTON — April 27, 2021 — GE (NYSE:GE) announced results today for the first quarter ending March 31, 2021.
GE Chairman and CEO H. Lawrence Culp, Jr. said, “I am proud of the GE team's solid first quarter results, despite a still difficult environment for Aviation. We are improving our cash performance and profitability with Industrial free cash flow growth of $1.7 billion year-over-year, excluding BioPharma, and organic margin expansion across all segments, except Aviation. This continued progress sets us up well to deliver on our 2021 commitments.”
Culp added, “Our recent GECAS transaction serves as an important catalyst in our transformation to a more focused, simpler, and stronger industrial company. At the same time, our businesses are building momentum by accelerating our lean and decentralization efforts. We are shifting more toward offense and capturing opportunities in the energy transition, precision health, and future of flight. I am confident we are well positioned to drive profitable growth, achieving high single digit free cash flow margins over time and creating long-term value for shareholders.”
GE continues to build momentum on a stronger foundation:
- Simplifying and strengthening GE: The recently announced GECAS and AerCap transaction focuses GE on its industrial core and provides cash and a meaningful equity stake for further upside and flexibility as the aviation industry recovers. GE expects to use the proceeds from the transaction to further reduce debt for a total reduction of more than $70 billion since the end of 2018.
- Accelerating lean & decentralization: GE’s lean transformation is scaling company-wide, driving sustainable performance, including improved safety, quality, delivery, and cost, as well as high-quality revenue and cultural change. Coupled with significant decentralization efforts, GE is enabling improvement at deeper levels of the organization across nearly 30 P&Ls to drive greater accountability and move action closer to customers.
- Investing in technology and serving customers: Driving organic growth efforts through new product introductions and services capabilities. Recent wins across our portfolio include:
- Energy transition: Secured largest combined Onshore Wind project in Renewable Energy’s history, consisting of more than 530 turbines for the 1.5GW North Central Wind Energy Facilities in Oklahoma. Began first commercial operation of Gas Power’s 9HA.02 gas turbine, the world’s largest and most efficient gas turbine, at Southern Power Generation’s 1.4GW plant in Malaysia.
- Precision health: Launched new, innovative solutions to support clinicians treating patients at the point-of-care, assisting clinicians fighting COVID-19. Vscan Air™, a wireless, pocket-sized ultrasound with whole-body scanning capabilities, delivers high-quality images directly to the clinician enabling sharing with patients in real-time. Also launched Venue Fit™, a simplified, compact, intuitive ultrasound, as well as an industry-first AI offering for cardiac imaging and a tool to display lung abnormalities on the Venue™ and Venue Go™.
- Future of flight: Secured agreements from Southwest Airlines for CFM International’s LEAP-1B engines to power 100 Boeing 737 MAX 7 aircraft, along with a long-term services agreement, and Scandinavian Airlines for CFM's LEAP-1A engines to power 35 additional A320neo family aircraft, also with a long-term services agreement, valued at $2.9 billion. CFM's LEAP engines reduce fuel consumption by 15% compared to CFM56 engines.
Please visit our investor website for full information:
Caution Concerning Forward Looking Statements
Our public communications and SEC filings may contain statements related to future, not past, events. These 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," "will," "would," "estimate," "forecast," "target," "preliminary," or "range." Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the impacts of the COVID-19 pandemic on our business operations, financial results and financial position and on the world economy; our expected financial performance, including cash flows, revenues, organic growth, margins, earnings and earnings per share; macroeconomic and market conditions and volatility; planned and potential business or asset dispositions, including our plan to combine our GE Capital Aviation Services (GECAS) business with AerCap; our de-leveraging plans, including leverage ratios and targets, the timing and nature of actions to reduce indebtedness and our credit ratings and outlooks; GE's and GE Capital's funding and liquidity; our businesses’ cost structures and plans to reduce costs; restructuring, goodwill impairment or other financial charges; or tax rates.
For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include:
- the continuing severity, magnitude and duration of the COVID-19 pandemic, including impacts of the pandemic, of businesses' and governments' responses to the pandemic and of individual factors such as aviation passenger confidence on our operations and personnel, and on commercial activity and demand across our and our customers' businesses, and on global supply chains;
- the extent to which the COVID-19 pandemic and related impacts will continue to adversely impact our business operations, financial performance, results of operations, financial position, the prices of our securities and the achievement of our strategic objectives;
- our success in executing and completing asset dispositions or other transactions, including our plan to combine our GECAS business with AerCap and our plan to exit our equity ownership position in Baker Hughes, the timing of closing for such transactions, the ability to secure regulatory approvals and satisfy other closing conditions (as applicable), and the expected proceeds and benefits to GE;
- changes in macroeconomic and market conditions and market volatility (including developments and volatility arising from the COVID-19 pandemic), including interest rates, the value of securities and other financial assets (including our equity ownership position in Baker Hughes and the equity ownership position that we will hold in AerCap after completing our announced plan to combine GECAS with AerCap), oil, natural gas and other commodity prices and exchange rates, and the impact of such changes and volatility on our financial position and businesses;
- our de-leveraging and capital allocation plans, including with respect to actions to reduce our indebtedness, the timing and amount of GE dividends, organic investments, and other priorities;
- further downgrades of our current short- and long-term credit ratings or ratings outlooks, or changes in rating application or methodology, and the related impact on our liquidity, funding profile, costs and competitive position;
- GE's liquidity and the amount and timing of our GE Industrial cash flows and earnings, which may be impacted by customer, supplier, competitive, contractual and other dynamics and conditions;
- GE Capital's capital and liquidity needs, including in connection with GE Capital's run-off insurance operations and discontinued operations, the amount and timing of required capital contributions to the insurance operations and any strategic actions that we may pursue; the impact of conditions in the financial and credit markets on GE Capital's ability to sell financial assets; the availability and cost of funding; and GE Capital's exposure to particular counterparties and markets, including through GECAS to the aviation sector and adverse impacts related to COVID-19;
- global economic trends, competition and geopolitical risks, including changes in the rates of investment or economic growth in key markets we serve, or an escalation of sanctions, tariffs or other trade tensions between the U.S. and China or other countries, and related impacts on our businesses' global supply chains and strategies;
- market developments or customer actions that may affect levels of demand and the financial performance of the major industries and customers we serve, such as secular, cyclical and competitive pressures in our Power business, pricing and other pressures in the renewable energy market, levels of demand for air travel and other dynamics related to the COVID-19 pandemic, conditions in key geographic markets and other shifts in the competitive landscape for our products and services;
- operational execution by our businesses, including the operations and execution of our Power and Renewable Energy businesses, and the performance of our Aviation business;
- changes in law, regulation or policy that may affect our businesses, such as trade policy and tariffs, regulation related to climate change, and the effects of tax law changes;
- our decisions about investments in new products, services and platforms, and our ability to launch new products in a cost-effective manner;
- our ability to increase margins through implementation of operational changes, restructuring and other cost reduction measures;
- the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of Alstom and other investigative and legal proceedings;
- the impact of actual or potential failures of our products or third-party products with which our products are integrated, and related reputational effects;
- the impact of potential information technology, cybersecurity or data security breaches; and
- the other factors that are described in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2020, as such descriptions may be updated or amended in any future reports we file with the SEC.
These or other 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.
Our public communications and SEC filings may include forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.
Our financial services business is operated by GE Capital Global Holdings, LLC (GECGH). In our public communications and SEC filings, we refer to GECGH and our financial services business as “GE Capital.” We refer to the industrial businesses of the Company as “GE Industrial.”
GE’s Investor Relations website at www.ge.com/investor and our corporate blog at www.gereports.com, as well as GE’s Facebook page and Twitter accounts, contain a significant amount of information about GE, including financial and other information for investors. GE encourages investors to visit these websites from time to time, as information is updated and new information is posted.
Additional Financial Information
Additional financial information can be found on the Company’s website at: www.ge.com/investor under Events and Reports.
Conference Call and Webcast
GE will discuss its results during its investor conference call today starting at 8:00 a.m. ET. The conference call will be broadcast live via webcast, and the webcast and accompanying slide presentation containing financial information can be accessed by visiting the Events and Reports page on GE’s website at: www.ge.com/investor. An archived version of the webcast will be available on the website after the call.
GE (NYSE:GE) rises to the challenge of building a world that works. For more than 125 years, GE has invented the future of industry, and today the company’s dedicated team, leading technology, and global reach and capabilities help the world work more efficiently, reliably, and safely. GE’s people are diverse and dedicated, operating with the highest level of integrity and focus to fulfill GE’s mission and deliver for its customers. www.ge.com
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