In GE's Power business, performance was weaker than the company expected. The Power market was tough, driving fewer outages and upgrades for our services business and fewer sales of our high margin aero derivative units. The company said it also had poor execution that resulted in project delays and cost of quality.
“Throughout our 125-year history GE has been known as a company that combines innovation and technology with execution intensity to produce outstanding results for our customers and shareowners,” said John Flannery, GE chairman and CEO. “We are focusing on redefining our culture, running our businesses better, and reducing our complexity.”
GE highlighted several large deals and important partnerships from the quarter. GE Renewable Energy won a contract to supply America’s largest wind farm, Invenergy’s Windcatcher project in Oklahoma, with 800 GE turbines using the company’s Digital Wind Farm technology. Cathay Pacific signed a $1 billion order in jet engines and services to power a fleet of 32 new Airbus A321neo aircraft with LEAP-1A engines.
GE has also been expanding its digital business, GE Digital, which grew orders more than 50 percent in the third quarter. Its most recent partnership with Apple, for example, will bring Predix, GE’s software platform for the Industrial Internet, to Apple’s iPhone smartphones and iPad tablets used by hundreds of millions of people around the world.
The company also accelerated its efforts to cut spending and boost profits, reporting $500 million in structural cost out this quarter. This brings the total to $1.2 billion year-to-date or $200 million higher than our total year plan.
GE also made progress in streamlining and simplifying its portfolio, closing transactions to sell the GE Water & Process Technology business for $3.4 billion and signing a deal to sell its Industrial Solutions unit for $2.6 billion. Earlier in July, GE also announced the completion of the combination of GE’s oil and gas business with Baker Hughes, creating the world’s first fullstream oil and gas company.
On November 13th, John Flannery will provide an update on the company and its strategy at GE’s Investor Update. The meeting will be webcast live on GE's investor website. Sign up for our investor newsletter to learn more over the coming weeks.