PRESS RELEASE
GE Reports Third Quarter 2008 Earnings of $4.5 billion;
Revenues of $47.2 billion, up 11%;
Infrastructure Orders of $23 billion, up 9%;
On Track to Earn ~$20 billion in 2008
3Q 2008 Earnings In Line with 9/25/08 Revised Guidance (Continuing Operations)
| | 9/25 Forecast | Actual |
| Earnings per share | $.43-$.48 | $.45, (10%) |
| Industrial segment earnings (ex. C&I) | +10-15% | +12% |
| Financial services earnings | ~$2.0 billion | $2.0 billion, (38%) |
| Infrastructure orders | +10% | +9% |
| Commercial paper | <$90 billion | $88 billion |
| ü | Board-approved plan to maintain dividend at $1.24 per share through 2009 |
Other Highlights (Continuing Operations)
| § | Industrial organic revenue growth of 10%; total organic revenue growth of 3% |
| § | Global revenue growth of 14%; global industrial revenue growth of 20% |
| § | Total orders backlog of $170 billion; equipment backlog up 19%; service backlog up 22% |
| § | ROTC of 17%; Industrial CFOA growth of 5% |
| § | Higher loss provisions of $0.5 billion |
Fairfield, Conn., Oct. 10, 2008 – GE announced today third quarter 2008 earnings from continuing operations of $4.5 billion, or $.45 per share, down 12% and 10%, respectively, from third quarter 2007, driven primarily by a decrease in financial services earnings. Third quarter revenues from continuing operations were $47.2 billion, up 11%.
GE Chairman and CEO Jeff Immelt said, “On September 25, we revised our third-quarter and full-year 2008 guidance to reflect the current volatile environment. Reported earnings are fully in line with guidance, and we have continued to take decisive steps to strengthen GE in a tough environment.
“Our infrastructure and media businesses continued to see signs of strength,” Immelt said. “Energy Infrastructure led the quarter with a 31% increase in segment profit based on broad-based global demand and double-digit increases in orders and services. NBC Universal grew segment profit 10%, its eighth straight quarter of growth. Cable and films had a solid quarter, and the success of the
Beijing Olympics showed the value of the network model. Technology Infrastructure grew segment profit 2%, with Aviation’s strong performance partially offset by a challenging quarter at Healthcare.
“Overall industrial growth should continue based on solid orders. Infrastructure orders grew 9%, with 5% growth in equipment and 16% growth in service,” Immelt said. “Our total orders backlog stands at $170 billion, up 20% from last year. We are encouraged by our sustained orders growth in services, as these revenues are reliable with attractive margins even in a period of economic volatility.
“Our financial services business generated $2 billion of earnings, consistent with our revised expectations. While GE Capital is not immune from the current environment, we continued to outperform our financial services peers. We are improving our margins and focusing these businesses on the right products and markets. GE Capital is on track to earn over $9 billion for the year,” Immelt said.
“In addition, GE has taken proactive steps to reduce leverage and improve liquidity, consistent with being one of six Triple-A-rated industrial companies in the U.S. We have raised $15 billion of committed capital that makes the Company more secure in the short term, but could be used to play offense in the long term,” Immelt said.
Third Quarter 2008 Financial Highlights:
Earnings from continuing operations were $4.5 billion, down 12% from $5.1 billion in the third quarter of 2007. EPS from continuing operations was $.45, down 10% from last year. Segment profit fell 11% in the quarter, as strong 31% growth at Energy Infrastructure was more than offset by a 33% decline at Capital Finance.
Including the effects of discontinued operations, third quarter net earnings were $4.3 billion ($.43 per share) in 2008 and $5.6 billion ($.54 per share) in the third quarter of 2007.
Revenues grew 11% to $47.2 billion. GE Capital Services’ (GECS) revenues grew 2% over last year to $18.4 billion. Industrial sales were $28.9 billion, an increase of 17% from the third quarter of 2007.
Cash generated from GE operating activities in the first nine months of 2008 totaled $13.6 billion, down 18% from $16.7 billion last year, reflecting a $3.6 billion decrease in GECS’ dividends primarily due to a non-repeat $2.7 billion special dividend and a third quarter 2008 reduction in the GECS dividend rate to 10% of earnings. The Company had solid Industrial cash flow from operating activities of $11.3 billion, an increase of 5%, for the first nine months of 2008.
“We are on track to meet our September 25 revised guidance for the full year, adjusted for dilution,” Immelt said. “We have taken a number of steps to protect investors from the downside risk in financial services, and we have ways to mitigate potential disruptions in infrastructure and media markets, but the environment remains challenging. We have big backlogs, great products, stable service revenue, strong operating discipline, an unmatched global position and multiple revenue streams. As a result, the Company is well positioned to perform in a very difficult environment, and our Board has approved our plan to sustain the GE dividend through 2009,” Immelt said.
GE will discuss preliminary third quarter 2008 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.
* * *
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, and media content, 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 “expect,” “anticipate,” “intend,” “plan,” believe,” “seek,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could adversely or positively affect our future results include: the behavior of financial markets, including fluctuations in interest and exchange rates, commodity and equity prices and the value of financial assets: continued volatility and further deterioration of the capital markets; the commercial and consumer credit environment; the impact of regulation and regulatory, investigative and legal actions; strategic actions, including acquisitions and 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; and numerous other matters of national, regional and global scale, including those of a political, economic, business and competitive 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.
Media Contact:
Russell Wilkerson, 203.373.3193 (office); 203.581.2114 (mobile)
russell.wilkerson@ge.com
Investor Contact:
Trevor Schauenberg, 203.373.2468 (office)
trevor.schauenberg@ge.com
GENERAL ELECTRIC COMPANY
Condensed Statement of Earnings
