GE announced today first-quarter 2010 earnings from continuing operations (attributable to GE) of $2.3 billion, down 18% from the first quarter of 2009, or $0.21 per share. Revenues were $36.6 billion for the quarter, down 5% from a year ago, reflecting acceleration of GE Capital downsizing.
“GE has leadership positions in Infrastructure and Financial Services. We are investing in new products, services and emerging markets. The company is positioned to deliver long-term shareowner value.”
"GE's environment continued to improve in the first quarter of 2010," GE Chairman and CEO Jeff Immelt said. "We saw encouraging economic signs, including increases in airline passenger miles and freight loadings, declines in receivables delinquencies, and growth in local advertising markets. Total company backlog of equipment and services held steady from the prior quarter at $174 billion. Our Healthcare and Oil & Gas businesses experienced solid orders growth and our equipment and services backlog remains strong.
"Our business model is performing," Immelt said. "We are expanding Industrial margins and realizing benefits from over two years of restructuring, while increasing investment in R&D to drive profitable organic growth.
"We are very encouraged by GE Capital's performance, earning $0.6 billion in the quarter," Immelt said. "We are seeing solid signs of stabilization. Losses, delinquencies and non-earning assets (excluding the impact of FAS 167) declined in the quarter. At the same time, reserve coverage increased. We are originating new business at attractive margins and our funding costs have declined. GE Capital losses seem to have peaked. Commercial real estate continues to be challenging, but the risks are understood and we expect them to be manageable. We have strengthened the GE Capital franchise and are on track for solid earnings growth."
Excluding the impact of the Olympics, Industrial margins improved to 14.7%, up 30 bps from a year ago, reflecting good performances at Energy, Healthcare and Home & Business Solutions. The company grew R&D investment by 16% in the first quarter and has a pipeline of new products and services. Cash generated from Industrial operating activities totaled $2.6 billion in the quarter, on track for $13-$15 billion this year. At quarter-end, GE had $70 billion of consolidated cash.
"Our 2010 framework remains achievable with potential for upside," Immelt said. "We may evaluate additional restructuring that will improve our earnings power going forward. We will have substantial cash available for allocation and we expect to grow earnings and dividends in 2011 and beyond."
Positive items were offset by charges in the quarter. After-tax transaction gains of $0.02 per share were offset by $0.02 per share in after-tax restructuring and other charges.
"We are leading a renewed GE," Immelt said. "GE has leadership positions in Infrastructure and Financial Services. We are investing in new products, services and emerging markets. The company is positioned to deliver long-term shareowner value."
First-Quarter 2010 Financial Highlights:
Earnings from continuing operations attributable to GE were $2.3 billion, down 18% from $2.9 billion in the first quarter of 2009. EPS from continuing operations was $0.21, down 19% from last year. Segment profit fell 16% compared with the first quarter of 2009, as 12% growth at Energy Infrastructure was more than offset by earnings declines of 41% at GE Capital, 18% at Technology Infrastructure and 49% at NBC Universal.
Including the effect of discontinued operations, first-quarter net earnings attributable to GE were $1.9 billion ($0.17 per share attributable to common shareowners) in 2010 compared with $2.8 billion ($0.26 per share attributable to common shareowners) in the first quarter of 2009. During the first quarter, the company recorded incremental reserves related to the 2008 disposal of our GE Money Japan business, which is reflected in discontinued operations.
Revenues decreased 5% to $36.6 billion. GE Capital Services' (GECS) revenues fell 9% versus the first quarter of last year to $13.2 billion. Industrial sales were $23.5 billion, down 2% from the first quarter of 2009.
Cash generated from Industrial operating activities in the first three months of 2010 totaled $2.6 billion, down 17% from $3.1 billion in the first quarter of last year.
The accompanying tables include information integral to assessing the company's financial position, operating performance and cash flow.
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