By David Lurie
In his first earnings release following last week’s announcement that GE would sell most of its banking assets, Chairman and CEO Jeff Immelt said GE’s industrial profits grew by 9 percent during the first quarter of 2015. Industrial earnings per share, a key metric used by Immelt to measure the performance of GE’s industrial holdings, increased by 14 percent.
Immelt also said that margins continued to expand during the quarter - with operating profit margins rising 90 basis points - and that six out of GE’s seven industrial businesses grew their margins.
“GE performed well in the first quarter, in an environment that remains volatile but with continued growth opportunities in infrastructure,” Immelt said. “This was an important quarter for GE. We delivered good first-quarter results in our industrial businesses.”
The best industrial performers included GE’s Aviation unit (profit up 18 percent and orders up 36 percent), Transportation (profit up 11 percent and deliveries up 22 percent), and Energy Management. Despite a challenging environment caused by a slump oil prices, GE’s oil and gas division also reported an organic 11 percent increase in profit.
Immelt highlighted a recent $850 million deal with Eni Ghana to supply machinery, technology and workers for the country’s Three Points Block offshore oil field.
“Our industrial businesses are performing well and we will continue to invest in our competitive advantages built on the GE Store,” Immelt said, referring to GE’s ability to share technology and know-how between its businesses. “We will continue to boost margins and returns. This is the plan for the future of GE as a fast-growth, high-tech industrial company.”
Above: GE Transportation’s new Tier 4 locomotive is the first freight train engine that meets the U.S. government’s strict Tier 4 emission standards. The locomotive’s design will cut particulate matter (PM) emissions by 70 percent and nitrogen oxide (NOx) emissions by 76 percent, compared to GE’s current Tier 3 machines. GE has alredy received 1,355 orders for the locomotives. Images credit: Vincent Laforet
Last week, Immelt announced GE would sell most of its GE Capital assets by 2018, a move that would reshape the company and further the role of its industrial businesses as the principal source of GE’s earnings.Immelt said he wanted to “profoundly change the company” and “lead the next generation of industrial progress.” According to this plan, by 2018, GE’s industrial businesses will generate at least 90 percent of GE’s operating earnings, up from 58 percent last year.