The last few years have certainly not been kind to GE, which came in as the worst performing stock in the Dow Jones in 2017. Reporting a Q4 2017 loss of $10 billion, the company has seen better days. While the conglomerate figures out what to do with a sinking power division, they are also, as of January 24, 2018, under SEC investigation for taking a $6.2 billion after-tax charge to their insurance division. Other than power and insurance, the company is growing in key areas like Aviation and Renewable Energy. After hiring new CEO John Flannery in September of 2017, it remains to be seen which businesses will rise to the forefront as GE figures out its next move. On April 20, 2018, GE reported better-than-expected Q1 2018 earnings, total revenue rising 7 percent to $28.66 billion with a net income of 4 cents per share. This strong performance mainly stems from double-digit growths from its aviation, transportation and healthcare divisions.
The former bedrock of this industrial giant, GE Power is a wholly owned subsidiary of General Electric and remains the largest business division, although it is currently on a sharp downward trajectory. This is especially true after the sale of GE Capital and the refocusing on core business segments. This division focuses on producing systems to implement power generation from wind, oil, gas and water to produce electric power. Interestingly, energy storage solutions were spun off from GE Power in October 2015 into a $1 billion startup called Current, focusing on building better batteries. For the year of 2017, GE reported revenue of $35.9 billion and profit of $2.7 billion. This was well below GE’s expectations, with the segment’s profits down 45% from the previous year and a whopping 88% from Q4 2016.
One of the few business segments that has been consistently growing, GE aviation provides jets, turboprop engines, and designs software used by major aviation corporations. The segment has plans to have 60,000 jet engines connected to the internet by 2020, which they claim will save fuel and create fewer delays at airports. The segment’s revenue grew 4% in calender 2017 to $27.3 billion, with profits of $6.6 billion.
The third largest segment, GE’s Healthcare division grew steadily to revenue of $19.1 billion in 2017, with profits of $3.4 billion. In addition to being a healthcare provider, GE also creates medical technology and software. The company also has an “exclusive” health cloud platform for its users. In April 2018, GE announced the sale of certain software assets of GE Healthcare’s Value-Based Care Division to private equity firm Veritas Capital for $1.05 billion in cash.
GE Oil & Gas
GE Energy was spun off into three subsidiaries, including the aforementioned GE Power & Water, GE Oil & Gas and GE Energy Connections. GE Oil & Gas, as the fourth-largest revenue generator for GE, focuses on providing smart and efficient solutions to the oil and gas industry. GE is betting that better efficiency in production is what most producers want and it seems to be right, with revenue in calendar 2017 totaling $18.2 billion, up 34% from the previous year.
GE Renewable Energy
Also known as GE Energy Connections, this energy management division focuses on distribution, conversion, automation and optimization of energy sources. By focusing on an area that promotes sustainability and increased efficiency, there is plenty of room to grow. With $10.28 billion in revenues in calender 2017, this is the GE company to watch in coming years. The company creates environmentally friendly power solutions with wind, hydro, and solar tech.
What Does It Mean?
General Electric is not the same company it was just two years ago. It’s still a massive conglomerate and is one of the top 10 largest companies in the world, but with renewed focus on its roots in industrial machines and green energy is keeping the company afloat.