GE delivers strong first quarter 2005 financial results
24 April 2005
Fairfield, Conn., USA General Electric (NYSE: GE) First Quarter
- Earnings grow 25% to more than $4.0 billion
- $.38 EPS, up 19%, exceeds high end of original guidance
- Nine of 11 businesses deliver at least double-digit earnings growth
- Revenues increase 19% to $39.8 billion, with 10% organic revenue
- Cash flow from operating activities (CFOA) up 10%, industrial CFOA up
- Full-year EPS guidance now $1.78-$1.83, high end of target range
GE achieved record first-quarter earnings of $4.0 billion, up 25% from
$3.2 billion in first quarter 2004, on revenue growth of 19%, the Company
announced 15 April 2005.
"GE is off to a terrific start in 2005," said GE Chairman and CEO Jeff
Immelt. "Our businesses and our end-use markets are seeing continued strong
growth. "We exceeded the high end of our initial expectations for the first
quarter and built solid momentum for the full year," Immelt said.
"Nine of our 11 businesses delivered at least double-digit earnings
growth, and we achieved organic revenue growth of 10%, exceeding our 8%
target. Our outlook remains positive: total orders for the quarter were up
16% over last year, and Commercial Finance and Consumer Finance assets were
up 17%. We've taken substantial pricing actions to offset the pressures of
"Our portfolio changes have created a faster-growth company, and the
moves we made in the last two years are paying off in excellent performance,
particularly at Healthcare, NBC Universal and Infrastructure," Immelt said.
"Revenues from our growth initiatives in services and from our new
platforms, such as security and water, grew 15% and 9% respectively, and
global revenues increased 33%.
"During the quarter, we continued to reduce our ownership of Genworth
Financial, and used the proceeds to eliminate 'parent-supported' debt at GE
Capital nine months ahead of schedule and further strengthen our triple-A
ratings. As a result, the financial services businesses will increase their
dividend to GE from 10% to 40% of their earnings in the second quarter and
we will accelerate our $15 billion share repurchase program.
"Based on our broad strength, we are now focusing our full-year EPS range
at the high end of our original guidance and targeting $1.78-$1.83, for EPS
growth of 12-15%," Immelt said.
First Quarter 2005 Financial Highlights
Earnings were a record $4.043 billion, up 25% from $3.240
billion in first quarter 2004. Earnings per share (EPS) were
$.38, up 19% from last year's $.32. Nine of GE's 11 businesses
— Advanced Materials, Commercial Finance, Consumer Finance,
Consumer & Industrial, Equipment & Other Services, Healthcare,
Infrastructure, NBC Universal and Transportation --
contributed at least double-digit earnings growth.
Revenues of $39.8 billion increased 19% over $33.4 billion in
first quarter 2004. Industrial sales increased 25% to $20.8
billion, reflecting the impact of acquisitions and solid
organic growth. Financial services revenues rose 13% over last
year to $19.1 billion. Organic revenue growth - which excludes
the effects of acquisitions, dispositions and changes in
currency exchange rates, as well as the Insurance segment -
was 10%. Organic revenue growth of the industrial businesses
was also 10%.
Cash generated from GE's operating activities in the first
quarter totaled $2.9 billion, up 10% from $2.6 billion last
year, reflecting a 19% increase in CFOA from industrial
businesses and a lower GE Capital Services dividend resulting
from the absence this year of a counterpart to last year's
special dividend of Insurance disposition proceeds.
"GE has all of the pieces in place to deliver sustained growth," Immelt
said. "We are in the right businesses with the right people executing our
strategy, and we are on track for double-digit growth in earnings and cash
flow in 2005 and beyond."
Healthcare financial highlights
Increased total orders 45% over first quarter 2004 to $3.5
billion, driven by 10% growth in services, to $1.3 billion,
19% growth in equipment, to $1.5 billion, and $0.7 billion at
Experienced continued strong demand for Imagination
Breakthrough products, including more than $140 million in
orders for the LightSpeed(R) Volume CT (computed tomography)
Anounced a clinical information technologies (IT)collaboration with
Intermountain Health Care (IHC), the nation's top integrated health care
system, to develop software for next-generation electronic medical records
and help accelerate their adoption; IHC also will adopt GE's computerized
physician order entry (CPOE) , cardiology and
pharmacy IT throughout its 2 million-patient system.
Received a three-year, single-source contract from Novation,
the supply company of VHA Inc. and the University HealthSystem
Consortium (UHC), to provide the VHA and UHC healthcare
organizations GE Healthcare's full line of injectable contrast
media products for X-ray, magnetic resonance and ultrasound
Announced participation in the construction of Pepin Heart Hospital and
Research Institute in Tampa, Fla., the third "digital hospital" organized
around GE's clinical information technologies, slated to open in fall 2005.
Announced that the Children's Cancer Institute of Australia is using
Healthcare's DIGE protein mapping technology to help identify mutations in
cells that are resistant to anti-cancer drugs.
Announced progress by Allegheny General Hospital, Pennsylvania, in
research using GE's CodeLink System bioarrays on gene expression changes
that occur in the heart after myocardial infarction, with the goal of
developing revolutionary new treatments to minimize the impact of a heart