The GE Brief: April 28, 2021

A SOLID START
 
Reporting first-quarter results on Tuesday morning, GE Chairman and CEO Larry Culp said the company is off to “a solid start to 2021” despite continued challenges in Aviation and a difficult comparison to last year. “I’m confident this sets us up well to deliver on our 2021 commitments and profitable growth for the long term,” he said. Although orders were down 8% organically and industrial revenue down 10% organically* from 1Q 2020, GE’s adjusted industrial margin expanded to 5.1%, up 110 basis points organically. “Notably, we saw organic expansion year-over-year, with three of our four businesses improving,” Culp told investors. GE’s backlog stands at $383 billion, he noted, and “remains a strength, with approximately 80% geared towards services, where we have higher margins.” GE’s industrial cash flow* was negative $845 million, but it was up $1.7 billion compared to last year, excluding GE’s BioPharma business sold in 2020. 
 
Foundational thinking: GE has been scaling lean management across the company to improve safety, quality, delivery and cost, as well as drive “high-quality growth.” Culp said “fortifying GE’s foundation” is allowing the company “to spend more time playing offense.” Recent victories include an agreement to supply more than 530 turbines to a wind farm in Oklahoma; LEAP engine and service agreements with Southwest and Scandinavian airlines; and GE Healthcare’s launch of the Vscan Air wireless ultrasound scanner. “As we look to the second quarter,” Culp said, “we expect industrial free cash flow growth of similar magnitude to what we saw this quarter.”
 
To read more about GE’s Q1 earnings and Culp’s outlook on the future, click here.

CLIMATE LEADERS
 
Even as a child, Danielle Merfeld was drawn to puzzles and experiments. Her love of science set her on a path that brought her to GE and took her to the White House last week. Merfeld, vice president and chief technology officer of GE Renewable Energy, presented ideas for a sustainable future at the Leaders Summit on Climate, the largest virtual gathering of world leaders to date that also included business and civil society representatives. She talked about the innovative work GE is doing to speed up decarbonization around the world and described the company’s latest technologies and research projects, from the digital grid to new superconductive generators for wind turbines and 3D-printed wind turbine blade tips. “It really feels like we’re changing the world,” Merfeld said. “This is an area where we’re reinventing the energy sector — making it more sustainable and affordable. And everybody can sort of connect with that.”
 
Women's champion: Merfeld, who has a Ph.D. in electrical and electronics engineering, has held a variety of roles at GE over the past 21 years, most recently serving as vice president and general manager of GE Research. She is also the co-leader of GE’s global Women’s Network, which works to attract, develop, inspire and retain female talent within the company, and is a big advocate for girls and women in professional and educational STEM programs. In February she was elected to the National Academy of Engineering.  
 
Click here to read more about Danielle Merfeld.

NEXT ENGINEERS
 
While speaking at the summit, Merfeld announced a commitment of up to $100 million from the GE Foundation to create Next Engineers, a program that aims to increase the diversity of young people in engineering and prepare them for college.
 
Generation next: The foundation partnered with FHI 360, an international nonprofit working to improve the health and well-being of people in the U.S. and abroad, to develop the program, which is scheduled to launch in select pilot cities in September. The goal is to reach more than 85,000 kids in approximately 25 cities around the world within the next decade. “If you think about all of these countries and the breadth of global need, the cohort of engineers required to solve the sustainable development problems is in the millions,” explains David Barash, executive director of the GE Foundation. “We are not just preparing engineers to support themselves. We need them to help build a better and more sustainable society.”
 
Read more about the GE Foundation’s new Next Engineers program here.
 

— QUOTE OF THE DAY —

“There are many steps — big and small — happening across our company right now that make me excited about our future.” 

— Larry Culp, GE chairman and CEO

Quote: GE Reports. Images: Andrew Robertson for GE Reports, Danielle Merfeld, GE Foundation. 

*Non-GAAP Financial Measure. The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures can be found within GE’s first-quarter 2021 earnings materials and 10Q posted to ge.com/investor.