General Electric Company
CEO : Mr. H. Lawrence Culp Jr.
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 7.0% YoY | -46.8% | -154.9% | 2023-01-24 |
Carolina Dybeck Happe says,
Revenue Growth and Orders
- Orders grew significantly across all segments in Q4 2022, up 7% for the full year.
- Revenue was up 11%, driven by Aerospace, Power, and Healthcare segments.
- Revenue was up 6% for the full year, driven by Aerospace revenue up 23% and higher margin services up double-digits.
Adjusted Margin Expansion
- Adjusted margin expanded 290 basis points in Q4 2022, led by Power and partially offset by renewables.
- Adjusted margin expanded 160 basis points for the full year, led by Aerospace and Power segments.
Cost Reduction and Improved Free Cash Flow
- Total cost reduction actions resulted in almost $1.5 billion of cost-out in 2022, driving significant improvement in EPS and free cash flow.
- Free cash flow was $4.3 billion in Q4 2022 and $4.8 billion for the full year, up over 80% improvement from the previous year.
Cash Flow and Debt Reduction
- Working capital was a source of cash, as accounts payable, progress collections, and contract assets contributed to the solid performance.
- Debt reduction and lower costs are expected to improve free cash flow significantly in 2023.
Corporate Restructuring
- Corporate cost is expected to be about $600 million in 2023 or roughly half of the 2021 sales line.
- Restructuring plans are being executed to set up standalone structures for GE Aerospace and GE Vernova post the healthcare spin, resulting in a smaller and linear cost structure.
Larry Culp says,
Spin-off of GE Healthcare and Debt Reduction
- Successfully separated GE Healthcare in a spin-off and distributed approximately 80% to GE shareholders in January 2022
- Retired an additional $11 billion of debt, bringing the total debt reduction over $100 billion since 2018
Improvement in Operations
- Further embedded lean and decentralization to better serve customers
- GE Healthcare Services represented a smaller part of the portfolio, with about 60% of revenues and 85% of backlog coming from other areas
- Delivered revenue growth, margin expansion, and better cash generation in Q4 2022
Strong Performance of GE Aerospace and Vernova
- GE Aerospace led the way as the company executed on an unprecedented ramp
- GE Vernova, including power and renewable energy, showed continued stability and took significant actions to position renewable energy for future profitability
- Plans to launch GE Vernova and GE Aerospace are progressing well, with key leadership positions being filled for both standalone businesses
Industry Trends and Catalysts
- External catalysts like U.S. climate legislation and the European focus on accelerating electrification are increasing investment in new decarbonization technologies
Investor Conference in March
- More details, including ongoing progress and timeline for the planned GE Vernova spin, to be shared at the investor conference in March
Q & A sessions,
GE Aerospace Q4 2022 Earnings
- Orders and revenue were up over 20%.
- Commercial services and equipment revenue grew about 30% and military revenue was up about 20%.
- Fourth quarter margins were above 18%, slightly better than expected, although down year-over-year.
- Expect aerospace revenue to be in the mid to high-teens and LEAP engine deliveries to grow about 50% in â23.
- Expect to deliver profit of $5.3 billion to $5.7 billion and higher free cash flow.
GE Vernova Q4 2022 Earnings
- Renewables orders were up 7% and onshore orders in North America more than doubled
- Expect mid single-digit growth, significantly better profit and flat to improving free cash flow in 2023
- Expect to more than double offshore revenue from about $0.5 billion in 2022
GE Power Q4 2022 Earnings
- Orders grew in all businesses and revenue was up double digits, largely driven by continued aero derivative momentum at Gas Power
- Expect low single-digit revenue growth driven by Gas Power services.
- Expect lower free cash flow year-over-year, continued earnings growth and strong services collections are offset by disbursements
Overall GE Outlook for 2023
- Expecting organic revenue growth in the high single-digit range, $1.60 to $2 for adjusted EPS
- Expecting significant profit growth for GE Aerospace in â23, low to mid-single-digit growth and profit of negative $600 million to negative $200 million for GE Vernova, and operational improvements to deliver higher earnings and improved working capital management across GE
No bad stock 