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Summary
- Aviation and healthcare segments saw their profit decline in double digits, while loss in the power and renewable segments narrowed.
- The company recorded a net loss of US$2.6 billion following the sale of GE Capital Aviation Services.
- Adjusted EPS rose to 3 cents while industrial free cash flow grew US$1.7 billion.
- GE also reiterated its previous guidance for full-year 2021.
General Electric Company (NYSE:GE) on April 27 reported a net loss in its first quarter as profit from the aviation and healthcare segments declined along with a loss from the discontinued commercial aviation leasing business.
GE’s shares were down 2.5 percent at US$13.23 in the afternoon trading.
The Boston-based industrial conglomerate posted a net loss of US$2.8 billion in the first quarter against a net income of US$2.6 billion in the first quarter last year.
Total revenue during the three months period fell 12 percent to US$17.1 billion from US$19.5 billion in the year-ago period.
In March, GE announced its plans to combine aircraft leasing unit GE Capital Aviation Services with AerCap Holdings N.V. in a US$30 billion deal. GE will receive US$24 billion in cash and a 46 percent stake in the combined business.
The company recorded a net loss US$2.6 billion in the first quarter arising from the sale, including a US$2.8 billion of loss in sales.
Adjusted EPS during the quarter was 3 cents, up from 2 cents in the previous year quarter. The company’s non-GAAP industrial free cash flows grew US$1.7 billion to US$845 million in the first quarter.
Segment-wise results
GE’s aviation unit, which develops jet engines, components and integrated systems, saw its revenue plunge 28 percent year over year to US$5 billion amid the prolonged impact from the coronavirus pandemic on the aviation industry. The profit from the segment came in at US$641 million, down 36 percent year over year.
The healthcare segment revenue declined 9 percent to US$4.3 billion from US$4.7 billion in the year-ago period. The unit, which provides medical diagnostic equipment and patient monitoring systems, logged US$698 million profit, down 19 percent from US$867 million in the year-ago period.
Revenue in the power segment came in at US$3.9 billion, down 3 percent year over year. However, the segment’s net loss narrowed 34 percent to US$87 million from US$131 million in the year-ago period.
Source: Pixabay
Meanwhile, the renewable energy unit’s net loss narrowed to US$234 million from US$327 million in first quarter of 2020 as the revenue grew 2 percent during the quarter to US$3.2 billion.
GE Capital segment posted a net loss of US$3 billion in the quarter, against the US$151 million net loss in the year-ago period. Continuing operations generated a net loss of US$172 million, while discontinued operations generated a net loss of US$2.9 billion, which includes the US$2.6 billion from the sale of the aviation leasing business.
2021 Outlook
GE did not update the full-year 2021 guidance, which it provided previously.
The company continues to expect its industrial revenue in 2021 to grow in low-single-digit range organically.
Adjusted EPS is anticipated in between 15 cents and 25 cents while industrial free cash flow is projected in the range of US$2.5 billion to US$4.5 billion.
