GE release results for second quarter 2020

GE release results for second quarter 2020

GE (NYSE:GE) announced results today for the second quarter ending June 30, 2020. Total orders $13.8B, (38)%; organic orders (35)%

• Total revenues (GAAP) $17.7B, (24)%; Industrial organic revenues* $16.3B, (20)%

• Industrial profit margin (GAAP) of (5.7)%, (390) bps; adjusted Industrial profit margin* (3.2)%, (1,170) bps

• Continuing EPS (GAAP) of $(0.27), including non-cash goodwill and other charges and the impact of marking GE’s investment in Baker Hughes to market; adjusted EPS* $(0.15)

• GE CFOA (GAAP) $(1.6)B; Industrial free cash flow* $(2.1)B

During the second quarter, GE also recognized several significant items that affected its financial results, including:
• Non-cash pre-tax goodwill impairment charges of $877 million related to Additive within GE’s Aviation segment and $839 million related to GECAS within GE Capital, which together negatively impacted continuing EPS (GAAP) by $0.18.

• A $608 million pre-tax charge to reflect updated billing and cost assumptions for certain long-term service agreements (LTSAs) at Aviation in light of COVID-19. This was driven by lower utilization forecasts, specific contract adjustments, and customer credit risk.

• A $1.8 billion pre-tax unrealized gain on marking its investment in Baker Hughes to market, which favorably impacted continuing EPS (GAAP) by $0.18.

Baker Hughes Update
Concurrent with today’s earnings release, GE is launching a program to fully monetize its Baker Hughes position over approximately three years. This program is designed to enable GE to sell its shares at a price that approximates the volume-weighted average price of the Baker Hughes shares over an extended period of time.

Executing on this program over time will allow GE to divest a substantial non-core asset, redeploy capital, enhance financial flexibility, and strengthen its balance sheet. GE expects to use proceeds from these transactions for further deleveraging.

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Source: GE

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