FAIRFIELD, Conn.--(BUSINESS WIRE)--April 13, 2006--Financial Highlights (Continuing Operations):
-- Revenues of $37.8 billion, up 10%; organic revenue growth of 9%
-- Earnings of $4.0 billion, up 14%; earnings per share (EPS) of $.39, up 18%
-- Total orders up 33%
-- Five of GE's six businesses deliver double-digit earnings growth
-- Cash from GE's operating activities (CFOA) up 132% to $6.7 billion; Industrial CFOA up 24%
-- Return on average total capital (ROTC) increasing 1.4 percentage points to 17%
GE announced today record first-quarter 2006 earnings from continuing operations of $4.0 billion or $.39 per share, up 14% and 18%, respectively, from first-quarter 2005. Revenues from continuing operations were also a record $37.8 billion, up 10% from last year's first quarter. Cash flow from GE's operating activities was a record $6.7 billion.
"We had a strong performance in the quarter highlighted by double-digit growth in earnings, revenues and cash flow," said GE Chairman and CEO Jeff Immelt. "Driven by demand for our industrial equipment, momentum in healthcare and continued performance in our financial services businesses, we achieved 9% organic revenue growth. Five of six of GE's businesses delivered double-digit earnings growth.
"Importantly, orders were strong across the company, growing 33%. Our orders for equipment and services were particularly robust, growing 67% and 20%, respectively. This gives us good visibility going forward," added Immelt.
"Our solid fundamentals are delivering strong cash flow growth. For the quarter, we generated $6.7 billion in CFOA, an increase of 132% over the first quarter of last year, bolstered by the proceeds from the sale of our remaining stake in Genworth. With our healthy cash position, we acquired 88 million shares of GE common stock, which accounts for $3 billion of the $7-9 billion stock repurchase we have planned for this year. We also increased ROTC by 1.4 percentage points over the first quarter of 2005 to 17% - good progress toward our long-term goal of exceeding 20%," said Immelt.
"The first quarter results are a good reflection of our strategic execution," added Immelt. "Our products are winning in the global infrastructure markets, creating a high-margin installed base. We have sustained our high-return growth in financial services in an increasing interest rate environment. Our diversified healthcare franchise is winning globally with technical leadership that is providing consistent growth. We improved our operating performance in the Industrial segment. And we are improving NBC Universal's performance based on a diversified business mix and quality programming," added Immelt.
First-Quarter 2006 Financial Highlights:
Earnings from continuing operations were $4.042 billion, up 14% from $3.560 billion in first quarter 2005. EPS from continuing operations were $.39, up 18% from last year's $.33. Five of GE's six businesses contributed double-digit earnings growth for the quarter.
Continuing revenues of $37.8 billion were 10% higher than last year's $34.4 billion. Industrial sales increased 11% to $23.1 billion, reflecting core growth, and the effects of the 2006 Winter Olympic Games and acquisitions. Financial Services revenues grew 8% over last year to $14.7 billion, reflecting core growth.
Cash generated from GE's operating activities in the first three months of 2006 totaled $6.7 billion compared with $2.9 billion last year, reflecting a 24% increase from the industrial businesses. The GE Capital Services' dividend of $3.4 billion for the quarter was up $3.2 billion over last year, primarily reflecting $2.5 billion from the sale of our remaining 18% stake in Genworth.
Earnings from discontinued operations were $0.3 billion and included the results of Genworth, GE Insurance Solutions and, beginning in first quarter 2006, GE Life, which is in the process of being sold. Accordingly, first-quarter 2006 net EPS were $.41, up 11% from the first quarter of 2005.
"Our strategic exit from the insurance business is on track," added Immelt. "We expect to close the sale of Insurance Solutions to Swiss Re in the second quarter of this year and anticipate selling GE Life in the next 12 months. When we complete the Insurance Solutions sale, we will receive up to $3 billion in cash and have a stronger portfolio of higher return, less volatile businesses.
"We are right on plan for the year. Our growth initiatives are performing well, our fundamentals are solid, our orders are up, and we have a healthy cash flow stream fueling our businesses and funding our share repurchase program. The company is well positioned going forward. For the second quarter, we expect double-digit segment profit growth in five of our six businesses and EPS from continuing operations of $.46-.48. We are reaffirming our full-year 2006 guidance of earnings from continuing operations increasing 13-17% to $1.94-2.02," said Immelt.
GE will discuss first quarter results on a conference call and Webcast at 8:30 a.m. ET today. Call information is available at www.ge.com/investor, and related charts will be posted there prior to the call.
GE (NYSE: GE) is Imagination at Work -- a diversified technology, media and financial services company focused on solving some of the world's toughest problems. With products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and advanced materials, GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. For more information, visit the company's Web site at www.ge.com.
Caution Concerning Forward-Looking Statements
Results are preliminary and unaudited. 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 often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties which could adversely or positively affect our future results include: the behavior of financial markets, including fluctuations in interest rates and commodity prices; strategic actions, including dispositions; future integration of acquired businesses; future financial performance of major industries which we serve, including, without limitation, the air and rail transportation, energy generation, media, real estate and healthcare industries; unanticipated loss development in our insurance businesses; and numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive and regulatory 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.
[See attachment for detailed financial numbers.]
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