GE Disappoints for Q4 2016, Plans to Drive Growth with Additive Manufacturing

As Q4 earnings roll out, GE is off the mark again—reporting for both the last quarter and 2016, comprehensively. Compared with last year’s Q4 earnings per share of $0.64 on revenues of $33.89 billion, this year General Electric Co. reported EPS of $0.39 on revenues of $33.09 billion. Analyst projections for this quarter showed an EPS of $0.46 on revenues of $33.63 billion.

While analysts had predicted full-year EPS at $1.49 on revenues of $124.33 billion, the full year report showed an EPS of $0.89 and revenues of $123.69 billion, compared with a year-ago loss of $0.61 per share and revenues of $117.39 billion.

Other highlights in the reports include:

• Industrial operating and verticals, earnings rose 36%, from $2.57 billion in the fourth quarter of 2015 to $3.48 billion
• Adjusted EPS dipped from $0.52 to $0.46
• Earnings for the full year rose from $1.66 billion in 2015 to $9.13 billion
• Adjusted EPS rose from $1.31 to $1.49
• Revenues in the oil and gas segment were down 22% year over year in the quarter from $4.36 billion to $3.40 billion.
• Energy connections revenue fell 29% to $3.33 billion and renewable energy revenues were up 29% to $2.50 billion.

It’s also notable that for last year, the GE financial report included large write-downs due to the company’s divesting of parts of GE Capital, to become Synchrony Financial. Other large deals that went south contributed to the disappointing earnings. Aviation, healthcare, and renewables performed very well during the year though. The company is additionally turning to additive manufacturing technology as a growth driver, following major investment in 2016.

“We executed on our 2016 goals and continued to drive growth across our businesses through the GE Store while investing in additive manufacturing and digital technology. We delivered $1.49 of earnings per share this year and 1% of organic growth,” said CEO Jeff Immelt.

“We reported $32.6 billion of free cash flow and dispositions and returned $30.5 billion to shareowners through dividends and buyback. We will continue to invest in the Industrial Internet to lead in productivity and performance for our customers in 2017.”

At the GE 4th Quarter 2016 Earnings Webcast, Jeff Immelt, Chairman and CEO; Jeff Bornstein, Senior Vice President and Chief Financial Officer; and Matt Cribbins, VP Investor Communications were in attendance, reporting the following additional information:

• 2017 should show an adjusted EPS in the range of $1.60 to $1.70.
• Estimated free cash flow and dispositions are forecast for this year in a range of $16 billion to $20 billion.
• GE also expects to return dividends totaling approximately $8 billion and buybacks totaling $11 billion to $13 billion in 2017.

The webcast described a volatile environment with challenges to continue within the oil environment. Optimism about the US economy is present, however, and GE sees globalization as being ‘redefined’ and ‘requiring flexibility.’

The first quarter is estimated by analysts to show a performance with EPS of $0.29 on revenues of $27.36 billion and the year to show EPS of $1.66 on revenues of $126.2 billion. Discuss in the GE forum at 3DPB.com.

[Sources: Yahoo Finance; GE]