PRESS RELEASE
GE Reports Record 3Q 2005 Financial Results
Third Quarter 2005 Highlights
| · | Revenues up 9% to $41.9 billion, with 8% organic revenue growth |
| · | Earnings of $4.7 billion up 15% |
| · | Earnings per share (EPS) of $.44 up 16% |
| · | All six GE businesses deliver double-digit earnings growth |
| · | Cash flow from operating activities (CFOA) up 51% to $14.7 billion, industrial CFOA up 20% |
| · | Full-year EPS target now $1.81-$1.83, up 12-14% |
| · | Stock buyback increased to more than $4 billion for 2005 |
Fairfield, Conn., Oct. 14, 2005 - GE’s third-quarter 2005 earnings were a record $4.7 billion, 15% higher than last year’s third quarter, with earnings per share (EPS) of $.44, 16% above the $.38 reported last year, the Company announced today.
“Despite a volatile environment, our fundamentals remain very strong, as we achieved double-digit earnings growth across all six of our businesses,” said GE Chairman and CEO Jeff Immelt. “Our businesses are generating solid top and bottom line growth. We increased revenue by 9% to $41.9 billion and produced another record for earnings in the quarter with $4.7 billion, an increase of 15%.
“This was our third consecutive quarter of 8% organic revenue growth. We continue to optimize our growth initiatives for sustained and consistent performance,” Immelt said. “Orders were up 11%, services sales increased 9%, revenue from accelerating growth platforms, such as Healthcare IT and Oil & Gas, grew 24% , and we generated strong double-digit global revenue growth from markets such as China and Europe.
“We delivered EPS at the high end of our previous guidance despite incurring over $377 million of hurricane-related reinsurance losses,” said Immelt. “Even in the face of significant natural disasters, our team once again delivered on our financial commitment to shareowners.
“Year-to-date cash flow from operating activities increased 51%. For the full year 2005, we expect to generate approximately $20 billion in CFOA, up more than 30%,” Immelt said. “Because of this strong position, we increased our planned stock buyback from $3 billion to more than $4 billion for 2005, which puts us ahead in our three-year $15 billion buyback schedule. We will continue to explore additional ways to return cash to investors.”
Third Quarter 2005 Financial Highlights
| · | Earnings were a record $4.677 billion, up 15% from last year’s $4.071 billion. EPS grew 16% to $.44, compared with last year’s $.38 per share. All six of GE’s businesses - Commercial Finance, Consumer Finance, Healthcare, Industrial, Infrastructure and NBC Universal - contributed double-digit earnings growth. |
| · | Revenues of $41.9 billion were 9% higher than last year's $38.3 billion. Industrial sales increased 8% (excluding the effects of the 2004 Summer Olympics broadcasts at NBCU) to $21.6 billion; and were up 3% including the ’04 Olympics. Financial services revenues of $20.4 billion were up 16% over last year. Organic revenue growth was 8%. |
| · | Cash generated from GE’s operating activities (CFOA) in the first nine months of 2005 was $14.7 billion, up 51% over last year’s $9.7 billion, reflecting a 20% increase in CFOA from industrial businesses. The GE Capital Services™ dividend of $5.5 billion for the nine months was up $3.4 billion over last year. |
“We are carrying our momentum into the fourth quarter,” said Immelt. “Our six businesses are aligned to better serve our customers. We are operating with greater efficiency, and we are identifying innovative ways to utilize our full portfolio of assets to offer new products and services.
“We raised the lower end of our full year 2005 guidance from $1.80 to $1.81, for a full year EPS outlook range of $1.81-1.83, an increase of 12-14%. We see $.56-.58 EPS in 4Q ‘05, up 10-14% (excluding the previously announced SFAS 133-related correction to the 4Q 2004), and up 6-9% as reported. And we expect organic revenue growth to hit our target of 8% for the full year,” said Immelt. “With our stable asset quality and continued strong orders, we are well positioned for a strong finish to the year and solid double-digit growth into 2006.
“The effects of the Hurricanes Katrina and Rita were felt both internally and externally at GE. I am extremely proud of the way the GE Family rallied to provide relief to their colleagues and the people in the Gulf Coast region,” added Immelt. “GE and our employees have contributed and helped raise more than $73 million. We are committed to helping rebuild this important region.”
GE will discuss preliminary third-quarter results on a conference call and Webcast at 8:30 a.m. ET today. Call information is available at www.ge.com/investor, and related charts will be posted there prior to the call.
Third Quarter 2005 Business Highlights
Infrastructure
| · | Awarded a $2.4 billion contract for development and manufacture of the F136 engine for the Joint Strike Fighter program. |
| · | Selected by Continental Airlines for a $250 million GEnx engine order to power its fleet of 10 new Boeing 787 aircraft. |
| · | Signed a $1.5 billion OnPoint Solutions contract with Southwest Airlines. The agreement covers the maintenance of their CFM56-7 fleet for eight years. |
| · | Began initial engineering and design of the first GE standardized 600-megawatt “cleaner coal” gasification plant. |
| · | Broke ground for the world's first 60 Hz advanced technology H System™power plant with Calpine Corporation in Southern California. |
| · | Obtained $1 billion in wind orders during the quarter and have record backlog as a result of increased demand following the recently passed U.S. energy bill. |
| · | Received $1.5 billion in rail orders, including 450 Evolution Series™ locomotives. Rail Services orders were up 25%+ for the quarter. |
| · | Entered into collaboration with Gen-Probe, Inc. to develop, produce and market biological water testing technologies. |
Commercial Finance
| · | Signed an agreement with IMAX Corp. to provide financing for new theaters. |
| · | Completed additional Genworth secondary offering of more than 116 million shares generating $3.3 billion of net proceeds. |
| · | Co-led a $330 million senior credit facility for Lifecare Holdings, Inc., the third largest operator of long-term acute care hospitals in the United States. |
| · | Partnered with Ascendas, a leading Asian real estate developer and operator of industrial and IT business parks, to establish and fund GE’s first real estate investment in India. |
| · | Announced a strategic partnership with Greystar Real Estate to acquire and develop multifamily properties in the U.S. and Canada. |
Consumer Finance
| · | Signed an agreement to acquire 43% of Hyundai Card, Korea's third largest credit card company, expanding on strategic alliance with Hyundai Capital in Korea. |
| · | Reached an agreement to acquire 25.5% of Garanti Bank, Turkey's third largest private bank, which will provide access to one of the fastest growing emerging markets. |
| · | Entered into an agreement with Ikea to offer Private Label Credit Cards to its customers in the U.S. |
| · | Signed an agreement to acquire the RV and Marine Financing unit of E*TRADE, a leading originator and servicer of RV and Marine loans in the U.S., expanding its position in the growing equipment finance industry. |
| · | Launched India's first consumer appliance co-branded card with State Bank of India and LG Electronics, building upon the extensive brand recognition and distribution network of both companies. |
| · | Entered into an agreement with eBay in Germany to provide financial services to eBay's 15 million German users. |
Industrial
| · | Continued focus and investment in award-winning high-end consumer products with GE Profile™SmartDispense™ dishwasher, GE Profile™ freestanding range with double ovens and GE Monogram® Walk-in Wine Vault. |
| · | Increased plastics revenue growth in China by 61%. |
| · | Opened new plastics automotive testing laboratory at the Moka Technology Center in Tochigi, Japan to help advance automotive safety technology by working with global automotive manufacturers and suppliers. |
| · | Acquired Everest VIT, Inc., an industrial remote visual inspection technologies company. |
| · | Opened GE Toshiba Silicones™newest Custom Compounding Center in Shanghai, China to develop and manufacture specially customized products for both heat-cured rubber and liquid silicone rubber applications. |
| · | Continued to expand globally during the quarter with Penske Logistics’ assumption of sole ownership and full operating control of Cotia Penske Logistics in Brazil, and the opening of facilities in Slovakia and Shanghai. |
| · | Introduced Penske’s Fleet InSite™ System, an easy-to-use, low-cost vehicle tracking system. |
NBC Universal
| · | Surpassed $100 million in domestic box office receipts with Universal Pictures' 40-Year-Old Virgin, and posted fourth-biggest Labor Day weekend box-office gross ever with nationwide opening of Focus Features' The Constant Gardener. |
| · | Propelled by critically acclaimed coverage of the Gulf Coast hurricanes, earned significant ratings victories with NBC News' Today and Nightly News with Brian Williams (topping closest competitors by nearly half a million viewers in both cases). |
| · | Delivered the quarter's top four comedies (Scrubs, The Office, Will & Grace, and Joey) and top two dramas (Law & Order and ER) in concentration of upscale young adults (adults 18-49 in homes with $100,000-plus incomes). |
| · | Generated The Tonight Show's second-biggest third-quarter winning margin (32%) in five years; Late Night with Conan O'Brien delivered its biggest third-quarter winning margin (69%) in six years in adults 18-49. |
| · | Delivered NBC's highest adult 18-49 rating in the time period since November 2002 (excluding Olympics) with the September 20 premiere of My Name Is Earl, which was the No. 1 comedy of the week on any network. |
| · | Delivered SCI FI Channel's biggest third-quarter audiences ever in prime time among adults 18-49 and adults 25-54; the channel ranked No. 1 among these demographic groups on Fridays. |
Healthcare
| · | Announced agreement to acquire IDX Systems Corporation, a leader in information technology software. |
| · | Increased total orders 8% over third quarter 2004 to $3.7 billion, driven by 9% growth in services, to $1.4 billion, and 7% growth in equipment, to $2.3 billion. |
| · | Grew equipment with strength in computed tomography (CT), ultrasound, and nuclear orders with strong demand for Imagination Breakthrough products, including more than $200 million in orders for the LightSpeed™ Volume CT scanner. |
| · | Grew Services with strength in Core Services and PACS (picture archiving and communications systems). |
| · | Signed an exclusive marketing agreement with InSightec Image Guided Treatment Ltd. to sell devices, which non-invasively treat uterine fibroids. |
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GE (NYSE: GE) is Imagination at Work -- a diversified technology, media and financial services company focused on solving some of the world’s toughest problems. With products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and advanced materials, GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. For more information, visit the company's Web site at www.ge.com.
Caution Concerning Forward-Looking Statements
This document contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties which could adversely or positively affect our future results include: the behavior of financial markets, including fluctuations in interest rates and commodity prices; strategic actions, including dispositions; future integration of acquired businesses; future financial performance of major industries which we serve, including, without limitation, the air and rail transportation, energy generation, media, real estate and healthcare industries; unanticipated loss development in our insurance businesses; and numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive and regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.
| Contact: | General Electric, Fairfield |
| | Russell Wilkerson, 203/373.3193 (office); 203-581-2114 (mobile) |
| | russell.wilkerson@ge.com |
Dollar amounts and share amounts in millions; per-share amounts in dollars; unaudited. Supplemental consolidating data are shown for “GE” and “GECS.” Transactions between GE and GECS have been eliminated from the “consolidated” columns. See note 1 to the 2004 consolidated financial statements at www.ge.com/annual04 for further information about consolidation matters.
