GE releases its 1Q’23 Results

GE released its first quarter financial results today, and I encourage you to read the full materials and listen to our earnings call, now at 7:30 AM ET.

Key highlights of GE’s financial performance for the first quarter 2023:

• Total orders $17.6B, +25%; organic orders +26%

• Total revenues (GAAP) $14.5B, +14%; adjusted revenues* $13.7B, +17% organically*

• Profit margin (GAAP) of 44.8%, +5410 bps; adjusted profit margin* 6.4%, +330 bps organically*

• Continuing EPS (GAAP) of $5.56, +$6.72; adjusted EPS* $0.27, +$0.36

• Cash from Operating Activities (GAAP) $0.2B, +$1.1B; free cash flow* $0.1B, +$1.3B

GE Chairman and CEO and GE Aerospace CEO H. Lawrence Culp, Jr. said, "The GE team is off to an encouraging start in 2023, with our results reflecting robust market demand and our progress operating leaner and more focused businesses. In the first quarter, we delivered double-digit top-line growth with all segments up organically and continued strength in services, as well as margin expansion in all segments. And we reported our first positive free cash flow in the first quarter in nearly a decade.”

Culp continued, "At GE Aerospace, we are growing rapidly and supporting our customers amidst the pronounced commercial ramp. At GE Vernova, we are seeing continued signs of progress in Renewable Energy while Power is delivering solid growth. Overall, GE is creating significant value today and tomorrow as we prepare to stand up these leading franchises as independent companies sometime in early 2024.”

In 1Q, top-line momentum was strong, with organic orders and revenue* +26% and +17%, respectively, and with all segments growing. We also improved profitability with +330 bps of organic margin* expansion, $0.27 of adjusted EPS*, up $0.36 year-over-year, and $0.1B of FCF*.

Looking more closely at our businesses, GE Aerospace has continued to see commercial momentum. Organic orders growth was +14% in the quarter, driven by Commercial Services and Defense. Organic revenue* grew +25% supported by Commercial Services volume, equipment growth with +53% LEAP engine deliveries year-over-year and improved pricing. Operating margin expanded +240bps organically* driven by volume, pricing and productivity. We continue to drive operational progress with lean, leading to sequential improvement in LEAP engine deliveries.

At GE Vernova, our strategy is tracking well with some continued signs of progress in Renewable Energy and Power continuing to deliver. Renewable Energy orders nearly doubled up +94% organically, led by Grid, while Onshore Wind delivered strong equipment growth in North America. Revenue grew 5% organically* driven primarily by Grid and Offshore Wind, and we saw sequential and year-over-year profit improvement. At Power, we delivered another quarter of solid revenue growth up +11% organically*, led by Gas Power, and margin expanded +50bps organically*, driven by services volume and favorable price and productivity.

With GE HealthCare now on its own, we’re focused on launching GE Aerospace and GE Vernova as independent, investment-grade companies. Further, we also continued to simplify the balance sheet, partially monetizing our AerCap stake, closing out our stake in Baker Hughes, and calling half of the preferreds. We named two new Board members, retired General Darren McDew and Jessica Uhl, who have deep domain expertise in aerospace and energy, respectively. We completed consultation with our European Works Council, allowing us to build teams with both internal and external leaders for both companies. Simply put, we’re getting these businesses ready to realize their full potential as independent industry-leaders.

Finally, as a friendly reminder, we will hold our 2023 Annual Shareholders Meeting virtually on May 3^rd at 10AM ET. 

Thank you for your continued interest in GE.

Best,

Steve & team

*Non-GAAP Financial Measure. The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures are included in our quarterly report on Form 10-Q and our first quarter earnings release.

This document contains "forward-looking statements." For details on the uncertainties that may cause our actual future results to be materially different than those expressed in our forward-looking statements, see here.