Fairfield, Conn. July 14, 2006 - GE announced today record second-quarter 2006 earnings from continuing operations of $4.9 billion or $.47 per share, up 11% and 15%, respectively, from second-quarter 2005. Revenues from continuing operations were also a record $39.9 billion, up 9% from last year’s second quarter. First-half cash from GE’s operating activities was a record $14.3 billion, up 78%.
“We continue to execute our strategy,” said GE Chairman and CEO Jeff Immelt. “We are generating consistently strong earnings growth, with EPS up 15%. Our returns are expanding, with ROTC up 2 points. And we are improving our businesses by leveraging our growth initiatives.
“Our solid quarterly results were highlighted by strong top- and bottom-line growth at Commercial Finance, demand for our products and services at Infrastructure and strong profitability at Healthcare, Consumer Finance and Industrial,” said Immelt. “We are making good progress at NBC Universal, which continues to improve with increasing ratings and a diversified business model of content leveraged across all delivery platforms.
“This is our sixth straight quarter of organic revenue growth that meets our goal of 2-3X GDP. This consistent performance demonstrates the quality of our businesses and the excellence of our execution,” added Immelt. “We see this string continuing. Total company orders were up 17% for the quarter, showing strong future demand for our products and services. Orders for equipment increased 33%, including a 59% surge in Infrastructure orders, while services orders increased 13%,” added Immelt.
“In addition, our businesses are producing healthy cash flows. For the first half, we generated $14.3 billion in CFOA, an increase of 78% over the same period of last year, with the inclusion of the $5.7 billion proceeds from the sale of Insurance Solutions and our final stake in Genworth. Industrial CFOA increased 9% to $6.7 billion. We used our cash to fund the businesses, pay our dividends and acquire 176 million shares of GE common stock. Through the first half of this year, we have funded $6 billion of the $7-9 billion stock repurchase we have planned for 2006.”
Second-Quarter 2006 Financial Highlights:
Earnings from continuing operations were $4.854 billion, up 11% from $4.376 billion in second quarter 2005. EPS from continuing operations were $.47, up 15% from last year’s $.41. Five of six businesses contributed double-digit earnings growth for the quarter.
Continuing revenues of $39.9 billion were 9% higher than last year’s $36.5 billion. Industrial sales increased 9% to $24.4 billion, reflecting core growth. Financial Services revenues grew 10% over last year to $15.3 billion, reflecting core growth and the effects of acquisitions.
Cash generated from GE’s operating activities in the first six months of 2006 totaled $14.3 billion compared with $8.0 billion last year, reflecting a $5.8 billion increase in GE Capital Services’ dividends, substantially all of which was proceeds from sales of insurance businesses, and a 9% increase from the industrial businesses.
Loss from discontinued operations was $2 million for the quarter and included the results of Genworth, the final transaction for GE Insurance Solutions, and GE Life, which is in the process of being sold. Accordingly second-quarter 2006 net EPS were $.47, up 7% from the second quarter of 2005.
“We are focused on sustained execution and long-term performance. We have a strong set of businesses managed by great people in many of the best markets in the world. Our goals are to generate organic revenue growth of 2-3X GDP, deliver 10%+ earnings growth and expand ROTC to 20% by 2008. For the third quarter, we expect double-digit segment profit growth in five of our six businesses and EPS from continuing operations of $.48-.50, up 12-16%. We are reaffirming our full-year 2006 guidance of earnings from continuing operations increasing 13-17% to $1.94-2.02,” said Immelt.
GE will discuss second quarter results on a conference call and Webcast at 8:30 a.m. EDT today. Call information is available at www.ge.com/investor, and related charts will be posted there prior to the call.
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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.
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General Electric, Fairfield
