General Electric Company (GE): history, ownership, mission, how it works & makes money

A Brief History of General Electric Company (GE)

Company Overview

General Electric Company, commonly known as GE, has been a significant player in multiple industries, including aviation, healthcare, power, and renewable energy. As of 2024, GE continues to adapt to market changes and technological advancements, maintaining a strong focus on innovation and operational efficiency.

Recent Financial Performance

For the three months ended September 30, 2024, GE reported total revenues of $9.84 billion, a 6% increase from $9.30 billion in the same period of 2023. For the nine months ended September 30, 2024, total revenues reached $27.89 billion, up 8% from $25.89 billion in the previous year.

Segment Performance

GE operates through various segments. In Q3 2024, the Commercial Engines & Services segment generated revenues of $7.00 billion, while the Defense & Propulsion Technologies segment contributed $2.24 billion.

Investments and Shareholder Returns

During the nine months ended September 30, 2024, GE repurchased 22.9 million shares for $3.74 billion. Dividends declared per common share for the same period were $0.84, an increase from $0.24 in 2023.

Challenges and Strategic Focus

GE has faced challenges such as supply chain disruptions and inflationary pressures impacting production and delivery. The company continues to invest in manufacturing facilities and supply chain improvements to enhance operational efficiency.

Future Outlook

Looking ahead, GE aims to maintain its focus on innovation, particularly in sectors such as aviation and renewable energy. The anticipated growth in national defense budgets is expected to further bolster the Defense & Propulsion Technologies segment.

A Who Owns General Electric Company (GE)

Major Shareholders

As of 2024, General Electric Company (GE) has a diverse ownership structure with significant institutional and individual shareholders. The largest shareholders include:

• Vanguard Group: 8.5% ownership
• BlackRock: 8.3% ownership
• State Street Corporation: 4.6% ownership
• Wellington Management: 4.1% ownership
• Geode Capital Management: 2.1% ownership

Stock Performance

As of September 30, 2024, GE's stock price was approximately $118.50, reflecting a year-to-date increase of 25%. The company has consistently repurchased shares, with a total of 22.9 million shares repurchased for $3.7 billion during the first nine months of 2024.

Shareholder Equity

GE's total equity balance as of September 30, 2024, was $19.1 billion, a decrease from $29.9 billion in the previous year. The breakdown of shareholders' equity includes:

Insider Ownership

Insider ownership is also notable, with CEO H. Lawrence Culp, Jr. holding approximately 0.5% of shares outstanding as of September 30, 2024. Other executives collectively own about 1.2% of the company.

Recent Corporate Actions

In 2024, GE completed the separation of GE Vernova, distributing approximately 80.1% of the shares of GE HealthCare, which significantly impacted retained earnings. The distribution of shares led to a decrease in retained earnings by $11.375 billion.

Market Capitalization

GE's market capitalization stood at approximately $127 billion as of September 30, 2024, reflecting its position as a major player in the industrial sector.

Dividends

GE declared dividends of $0.28 per share for the third quarter of 2024, up from $0.08 per share in the same quarter of the previous year. The total dividends paid for the nine months ended September 30, 2024, reached $312 million.

Financial Summary

For the three months ending September 30, 2024, GE reported:

Overall, GE's ownership structure is characterized by significant institutional holdings, a modest level of insider ownership, and a proactive approach to shareholder returns through dividends and share repurchases.

General Electric Company (GE) Mission Statement

Overview of Mission Statement

The mission statement of General Electric Company (GE) as of 2024 reflects its focus on innovation, sustainability, and operational excellence. GE aims to deliver solutions that help customers improve their productivity and efficiency while reducing environmental impact.

Mission Statement Details

GE's mission is to "create the technology that brings the world together." This encompasses a commitment to developing advanced technologies in sectors including aviation, power, renewable energy, and healthcare.

Financial Performance Indicators

GE has shown significant financial performance in recent quarters, indicating the effectiveness of its mission alignment with operational goals.

Strategic Goals and Objectives

GE's strategic goals involve enhancing its portfolio in high-growth sectors and driving digital transformation across its operations. The company has identified key areas for growth including:

• Aviation: Focus on next-generation engines and services.
• Renewable Energy: Expanding offshore wind and solar capabilities.
• Healthcare: Innovating in medical technologies and diagnostics.

Remaining Performance Obligations (RPO)

As of September 30, 2024, GE reported a total Remaining Performance Obligation (RPO) of $166.089 billion, reflecting a strong backlog of customer orders.

Commitment to Sustainability

GE is committed to sustainability and has set ambitious targets to reduce greenhouse gas emissions across its operations. The company has invested heavily in renewable technologies, reflecting its mission to lead in sustainable energy solutions.

Market Position and Competitive Advantage

GE maintains a strong market position with competitive advantages in technology and innovation, enabling it to respond effectively to market demands and customer needs.

Recent Developments

In March 2024, GE announced a new $15 billion share repurchase program, indicating confidence in its financial health and commitment to returning value to shareholders. This follows a significant increase in cash flows from operations, which totaled $4.5 billion for the nine months ended September 30, 2024.

Conclusion of Mission Alignment

GE's mission statement encapsulates its vision for growth and innovation, driving financial success and commitment to sustainability, while maintaining a focus on delivering value to all stakeholders.

How General Electric Company (GE) Works

Business Segments

General Electric Company (GE) operates through several key segments, primarily focusing on Aerospace, Healthcare, and Power. Each segment contributes significantly to GE's revenue and operational strategy.

Aerospace

The Aerospace segment includes commercial and military engines, and services. As of September 30, 2024, the segment reported:

• Total segment revenues: $7.003 billion
• Segment profit: $1.799 billion
• Segment profit margin: 25.7%

In the three months ended September 30, 2024, GE Aerospace delivered 501 commercial engines and reported a 1% decline in internal shop visit growth compared to the same period in 2023.

Healthcare

GE Healthcare focuses on medical imaging and diagnostics. The company has made significant investments in digital healthcare technologies, aiming to enhance patient outcomes and streamline hospital operations. Revenue from GE Healthcare was included in the total revenues for the nine months ended September 30, 2024, which were reported at $27.890 billion, compared to $25.893 billion for the same period in 2023.

Power

The Power segment provides equipment and services for power generation and transmission. This segment is crucial for supporting the global energy transition towards cleaner sources. Total revenues from the Power segment for the nine months ended September 30, 2024, were part of the overall revenue increase attributed to improved pricing strategies.

Financial Performance

For the three months ended September 30, 2024, GE reported:

For the nine months ended September 30, 2024, total revenues increased by $2.0 billion, or 8%, compared to the same period in 2023.

Cash Flow and Investments

Cash from operating activities was reported at $4.5 billion for the nine months ended September 30, 2024. This represents an increase of $1.1 billion compared to the same period in 2023. Free cash flow was $4.6 billion during the same period, driven by higher net income and lower income tax payments.

Borrowings and Debt Management

As of September 30, 2024, GE's total borrowings were $19.922 billion, down from $20.525 billion as of December 31, 2023. This decrease was primarily due to maturities and the replacement of a $10 billion credit facility.

Remaining Performance Obligation (RPO)

The RPO, which reflects unfilled customer orders, was reported at $166.089 billion as of September 30, 2024, compared to $154.003 billion at the end of 2023. This increase indicates a robust demand across GE's segments.

Dividends and Shareholder Returns

GE declared dividends of $0.28 per share for the three months ended September 30, 2024, compared to $0.08 per share in the same period of 2023. The company has been actively repurchasing shares, with 22.9 million shares repurchased for $3.744 billion during the nine months ended September 30, 2024.

Taxation and Effective Tax Rate

The effective income tax rate for GE was 10.6% for the nine months ended September 30, 2024, compared to 5.6% for the same period in 2023. This increase is attributed to higher pre-tax income.

Outlook and Strategic Initiatives

GE continues to focus on innovation and operational efficiency. The company is investing in advanced manufacturing technologies and digital solutions to enhance productivity and reduce costs across its operations.

Conclusion on Operational Strategy

Overall, GE's operational strategy is centered on leveraging its diverse portfolio across critical sectors, maintaining strong financial health, and positioning itself for sustainable growth in the rapidly evolving industrial landscape.

How General Electric Company (GE) Makes Money

Revenue Streams

General Electric Company (GE) generates revenue through various segments, primarily in Aerospace, Power, Renewable Energy, and Healthcare. As of Q3 2024, GE's total revenues were $9.8 billion for the three months ended September 30, 2024, reflecting an increase of $0.5 billion, or 6%, compared to the same period in 2023. Year-to-date, total revenues reached $27.9 billion, up from $25.9 billion in 2023, marking an 8% increase.

Key Business Segments

GE operates through several key segments, each contributing to its overall revenue. The main segments include:

• Commercial Engines & Services: This segment focuses on the manufacturing and servicing of jet engines, parts, and related services.
• Defense & Propulsion Technologies: This segment provides products and services for military applications, including advanced aircraft engines.
• Healthcare: Although GE HealthCare was spun off in 2023, it still influences GE's financials through retained interests.
• Power and Renewable Energy: These segments focus on generating electricity and providing renewable energy solutions.

Segment Performance

For the three months ended September 30, 2024, segment performance showed varied results:

Profitability Metrics

GE's profitability metrics for Q3 2024 include:

• Net Earnings: $1.85 billion, compared to $0.26 billion in Q3 2023.
• Earnings per Share (EPS): Diluted EPS was $1.56 for Q3 2024, up from $0.20 in Q3 2023.
• Profit Margin: Overall profit margin was 19.2%, up significantly from the previous year.

Cash Flow and Liquidity

Cash flows from operating activities for the nine months ended September 30, 2024, were $4.5 billion, an increase of $1.1 billion compared to the same period in 2023. Free cash flow reached $4.6 billion, up from $3.5 billion year-over-year.

Remaining Performance Obligations (RPO)

As of September 30, 2024, GE reported a total RPO of $166.1 billion, reflecting a strong backlog of orders:

Investments and Future Outlook

GE continues to invest heavily in R&D and capital expenditures to enhance its product offerings. The company is positioned to benefit from increased government spending in defense, with contracts like the $1.1 billion awarded for T700 series turbine engines through 2029.

Article updated on 8 Nov 2024

Resources:

• General Electric Company (GE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of General Electric Company (GE)' financial performance, including balance sheets, income statements, and cash flow statements.
• SEC Filings – View General Electric Company (GE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.