This summary is based on the first quarter fiscal 2008 earnings call conducted by General Electric Company (GE) on April 11, 2008.
Management:
Chairman of the Board, Chief Executive Officer: Jeffrey R. Immelt
Vice Chairman of the Company, Chief Financial Officer: Keith S. Sherin
Vice President, Investor Communications: Dan Janki
Key Investors Issues
- EPS were 43 cents per share compared to 44 cents per share last year.
- Net income fell 6% to $4.3 billion from $4.57 billion a year ago.
- Revenue climbed 8% to $42.24 billion from $39.20 billion last year.
First Quarter Highlights
Revenues of $42.2 million were up 8%.
- The industrial sales of $24 billion were up 12%, so the lower revenue number was in financial services.
- Earnings of $4.4 billion were down 12%, with earnings per share of 44 cents were down 8%, and then on a total reported basis, including the impact of discontinued operations, down 2%.
- Cash flow of $4.9 billion is down versus last year because of the special dividends in GE Capital. Industrial CFOA of $3.7 billion was up 8%.
- Taxes came in at 16%, four points lower than last year. The lower rate was all due to the GE Capital rate of 3%.
- The capital rate came in at 3% as a result of the lower U.S. pretax earnings, principally caused by the negative mark-to-market impact and lower gains. Since the U.S. earnings are taxed at a much higher rate than average rate, decreasing those earnings caused the average rate to decline.
Infrastructure revenues were $14.9 billion, up 23%, a segment profit of $2.6 billion, up 17%.
- Aviation revenues were up 25% and segment profit was up 11%.
- Revenues were up 8%. Total orders of $5.1 billion were down 11%.
- Commercial engines had $1.5 billion of orders. It is down 50% because of the tough comparisons in the first quarter of last year for Genex, but even with that the company added over 120 Genex orders and military engine orders were up 52%.
Product backlog continues to grow.
- The company ended the quarter at $19.3 billion, up 51%.
- The commercial engine revenues were up 10%.
- The company shipped 35 more commercial engines this year than last year. Service revenues were up 6%. In that, commercial was actually down 3%.
- The company had strong spare parts sales, $19.4 million a day versus 17.5 last year, up 11%. That was offset by lower contractual services results against some touch comparisons last year.
- Military engines were up 18% and Smiths added close to $600 million, about 18 points of the revenue.
- Op profit was up 11%, really driven by Smiths, up 7%, and the core operations up 4%.
Energy revenues were up 21%, segment profits were up 32%, total orders continue to be excellent.
- The orders of $4.8 billion were up 30%.
- Major equipment orders were up 60%.
- Thermal orders of $2.2 billion were up 125%.
- The company received orders for 38 gas turbines this year versus 33 last year.
- The thermal backlog that the company is working off is up to $7.4 billion, up 100% from a year ago.
- The wind business continues to perform well.
- Wind orders of $1.8 billion were up 40% and the backlog is now close to $12 billion, up more than two times from a first quarter a year ago.
- The power gen orders, prices positive were up 4%, which bodes well for the future.
- Revenues $5.6 billion were up 21%, driven by thermal.
- Thermal revenue was up 33%.
- The company shipped 36 gas turbines, up from 28 last year. The company shipped 569 wind turbines versus 524 last year and the service revenues were up 11%.
- Op profit was up 32%, driven by both volume and price at power gen.
- Oil and gas and transportation had strong performances and the asset quality in the verticals continues to be excellent. The company has zero non-earning assets in these two businesses.
Healthcare had a challenging quarter, both in the marketplace and with tough comparison.
