FAIRFIELD, Conn.--(BUSINESS WIRE)--April 11, 2003--GE's first quarter 2003 earnings before required accounting changes were $3.2 billion, or $.32 per share, compared with $3.5 billion, or $.35 per share, in first quarter 2002, the Company announced today.
"In this tough economic environment, eight of our 13 businesses delivered double-digit earnings growth," said GE Chairman and CEO Jeff Immelt. "At the same time they achieved this solid operating performance, Power Systems continued to manage the down cycle in its sales of large gas turbines. However, we planned for a tough and uncertain environment in 2003, and we remain comfortable with our target range of $1.55-$1.70 per share for the year.
"We also made excellent progress in the quarter on our strategic objectives," Immelt said. "We won new customers, and we grew our installed base of turbines, locomotives, jet engines and medical devices, on which we can provide services and build long-term customer relationships. We introduced new high-technology products and we continued to build our industrial growth platforms. In addition, we made strategic investments in our higher-return Consumer Finance and Commercial Finance businesses. We're on track to build a new technology, services and financial enterprise."
GE will discuss results on a conference call and Webcast at 8:30 a.m. EDT today. Call information and related charts are available at www.ge.com/investor.
First Quarter 2003 Financial Highlights
-- Earnings before required accounting changes were $3.214 billion, or $.32 per share, compared with $3.518 billion, or $.35 per share, in first quarter 2002. Eight GE businesses -- Aircraft Engines, Commercial Finance, Consumer Finance, Industrial Systems, Medical Systems, NBC, Specialty Materials and Transportation Systems -- contributed double-digit earnings growth in the quarter.
-- Revenues of $30.3 billion were 1% lower than in first quarter 2002, reflecting lower U.S. gas turbine sales at Power Systems and the absence in 2003 of NBC Winter Olympics broadcast revenues. Industrial sales were down 6% to $15.8 billion; excluding Power Systems in both periods and the Winter Olympics in 2002, industrial sales rose 7%. Sales of product services grew 20% to $5.1 billion. Financial services revenues of $14.7 billion were up 6%, and net revenues (revenues from services less interest and other financial charges) at Commercial Finance, Consumer Finance and Equipment Management grew 10%.
-- Cash generated from GE's operating activities, excluding progress collections, was $2.2 billion, flat with last year, as 22% cash growth at the industrial businesses was offset by the planned reduction in the GE Capital Services dividend to the parent company. Including progress collections, GE's total cash flow from operating activities was $1.6 billion, up 8% from last year's $1.4 billion.
-- Net earnings - earnings after required accounting changes - were $.30 per share in first quarter 2003 and $.25 per share in first quarter 2002. In first quarter 2003, GE recorded a non-cash transition charge to earnings of $215 million, or $.02 per share, for the change in accounting for costs associated with the eventual retirement of certain operating facilities as required by adoption of Statement of Financial Accounting Standards 143. In first quarter 2002, GE recorded a non-cash transition charge to earnings of $1.015 billion, or $.10 per share, for impairment of goodwill as required for adoption of Statement of Financial Accounting Standards 142.
"I'm proud of the team's performance in this challenging environment," Immelt said. "We continue to deliver on our financial commitments while executing our strategy to create long-term growth and high returns."
First Quarter 2003 Business Highlights
Power Systems
-- 33 heavy-duty gas turbines shipped from Greenville, South
Carolina, compared with 69 in first quarter 2002, with the
total installed base now exceeding 1,450.
-- China power producers' agreement to purchase 13 gas
turbine-based combined-cycle systems, with contracts valued at
$900 million, makes GE the leading supplier for China's Gas
Turbine Power Plants Construction Project.
-- Multi-year contractual services agreements total $28.6
billion, with 20% more gas turbines under contract than in
first quarter 2002.
-- Wind Energy reaches $2 billion mark in orders and commitments;
new customers include Los Angeles Department of Water and
Power, the largest municipally owned utility in the U.S.
-- Technology advances include progress in validation testing of
H System(TM) at Baglan Bay, Wales, with commercial operation
anticipated for later in 2003, and launch of a new remote
monitoring system enabling customers to view live test data
via the Web without having to travel.
-- Acquired majority ownership of Kvaerner Power Equipment Co.,
Ltd., a leading supplier of hydropower generation equipment in
China, and commenced a public tender offer for Jenbacher A.G.
of Austria, a leading reciprocating gas engine supplier.
Medical Systems (GEMS)
-- Total orders in the quarter of nearly $2.1 billion, up 12%
over first quarter 2002.
-- 125 orders for LightSpeed(16) multi-slice CT (computed
tomography) scanners, bringing total to 466 since their
introduction in June 2002.
-- Ultrasound orders up 25% to $171 million, with continued
strength of Voluson 730 4D Ultrasound System and GE LogiqBook
portable ultrasound system.
-- Surgical and vascular imaging orders up 18% to $164 million,
led by Innova 2000 digital cardiovascular system, with 18
post-launch orders for Innova 4100 during quarter.
-- GEMS Information Technology global orders up 24%, led by 45%
growth in orders for PACS (Picture Archiving and Communication
Systems), 25% growth in wireless patient monitoring and
further expansion in clinical information systems.
-- Medical services orders up 16% to $993 million.
-- GE and The Indiana Heart Hospital open the world's first
all-digital heart hospital, featuring all-digital cardiac cath
labs, state-of-the art digital imaging systems and high-speed
digital network for sharing patient data both inside the
hospital and with referring physicians.
-- Landmark cardiac disease study finds that GE's exclusive
Electron Beam Tomography(TM) technology is a better predictor
of coronary disease than other technologies.
Aircraft Engines (GEAE)
-- Total GEAE orders of $2.6 billion up 9% over first quarter
2002, reflecting service orders as well as engine orders from
China Air, Thai Airways, JAL, KLM and EVA, and engine orders
for CFMI (jointly owned by GE and Snecma) from Virgin Blue,
Copa, Aeromexico and Bouillon.
-- New multi-year service agreements total $200 million,
including agreements with Copa and Alaska Airlines, bringing
total agreements to $29.4 billion.
-- GEAE engines power more than 80% of U.S. military aircraft in
Operation Iraqi Freedom.
-- First flight by Boeing's new extended-range 777-300ER, powered
by GE90-115B engines, with commercial service targeted for
2004.
-- Ground testing conducted of the F110-132, highest-thrust
engine developed for F-16 fighter jet.
Commercial Finance
-- Assets increase to $196 billion, with 15% net income growth.
-- Asset quality high, with losses as percentage of receivables
well below historical average of top 100 banks.
-- New agreement with Terex Financial Services for a 10-year, $7
billion captive financing program.
-- Healthcare financial services assets up 28% to $8 billion, and
new strategic relationships with key equipment and service
providers formed.
-- Only 6 aircraft on the ground at the end of the quarter out of
1,160 owned for leasing.
Consumer Finance
-- Assets increase to $78 billion, with net income up 10%.
-- Asset quality stable, with delinquencies within normal
seasonal variation.
-- Agreements to acquire UK-based First National Bank's mortgage,
sales finance and home improvement portfolios and Conseco's
retail sales finance business, which will add $9.3 billion in
net earnings assets.
-- New private-label credit card program launched with U.S.-based
Meijer Stores.
-- Agreement to acquire AXA-Auxifina/Cognifi in Belgium brings
countries served to 36.
NBC
-- Double-digit earnings growth despite impact of war in Iraq on
advertising revenues and news coverage costs.
-- News platforms (NBC, MSNBC, CNBC) reach 23.1 million viewers
on March 19, the first evening of war, nearly 50% more than
the next competitor.
-- CNBC prime-time ratings up 12%, with post-March 18 viewership
increasing 134% over pre-war average in the quarter; MSNBC
viewership up by triple digits over first quarter 2002;
Telemundo ratings among adults 18-49 up 36% post-March 18
compared to pre-war average in the quarter.
-- NBC Nightly News, Meet the Press, and Today maintain No. 1
ratings positions.
-- Continued ratings leadership among adults 18-49: top-rated
three comedies (Friends, Will & Grace, Scrubs), two of the top
three dramas (ER and Law & Order), the top-rated late-night
programming (The Tonight Show with Jay Leno, Late Night with
Conan O'Brien and Saturday Night Live). Prime-time lineup also
leads among women 18-49, women 25-54 and adults 25-54.
-- Bravo adds 2 million subscribers since acquisition in December
2002, and grows prime-time ratings 23% among adults 25-54.
Industrial Systems
-- Acquisition of RAMiX Inc., leading supplier of embedded
systems to defense, aerospace, telecom and medical equipment
industries, and agreement to acquire UK-based SI Pressure
Instruments, provider of sensors to essential industries.
-- Multi-year agreements with Edwards Lifesciences Corporation to
provide miniature thermistors and pressure sensors for use in
catheters and disposable blood pressure transducers.
Specialty Materials
-- Completed acquisition of Osmonics, Inc. a global manufacturer
and marketer of high-technology water purification, filtration
and water handling systems; Osmonics to be combined with GE
Betz and GE Water Technologies into one business to give
customers an integrated approach to industrial water needs.
Transportation Systems
-- First commercial application of remote control locomotive
technology; improves customers' throughput and productivity
while making rail yards safer.
-- New signaling products introduced include safety-enhancing LED
signal rail crossing lights using GELcore technology, and
Integrated Wayside Platform that creates a common platform for
signaling technologies.
Consumer Products (GECP)
-- New appliance product launches include GE Profile(TM)
Stainless Steel cooking and refrigeration products.
-- Leading consumer magazine rates GECP's gas, electric and
smooth-top freestanding ranges and slide-in ranges tops in
their categories.
-- GE Reveal(TM) light bulbs surpass 100 million sales mark in
February, less than two years after product launch.
GE (NYSE: GE) is a diversified technology and services company dedicated to creating products that make life better. From aircraft engines and power generation to financial services, medical imaging, television programming and plastics, GE operates in more than 100 countries and employs more than 300,000 people worldwide. For more information, visit the company's Web site at http://www.ge.com.
Caution Concerning Forward-Looking Statements
This document includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in global economic, business, competitive, market and regulatory factors. More detailed information about those factors is contained in GE's filings with the Securities and Exchange Commission. This presentation includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, we have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in our GAAP Reconciliation file on our investor relations website at http://www.ge.com/en/company/investor/press/ge_1stq_03.htm.
[See attachment for detailed financial numbers.]
CONTACT:
General Electric, Fairfield
David Frail, 203/373-3387
[email protected]