BOSTON — GE announced results today for the second quarter ending June 30, 2021.
GE Chairman and CEO H. Lawrence Culp, Jr. said, “The GE team delivered strong overall performance in the second quarter. Orders and revenue returned to growth, our operating margins expanded across all segments, and we generated positive Industrial free cash flow. Momentum is building across our businesses, driven by Healthcare and services overall, with Aviation showing early signs of recovery. Based on our encouraging cash results, we are increasing our full-year free cash flow outlook.”
Culp continued, “GE is transforming to a more focused, simpler, and stronger high-tech industrial company. Our businesses are improving operations through lean, and with this solid foundation, we are driving more organic growth and investing in breakthrough technologies for our customers. The team is committed to innovating for a more sustainable world with leading positions in the future of flight, precision health, and the energy transition. With our focus on profitable growth and cash generation, I am confident we are well-positioned to achieve high single-digit free cash flow margins over time.”
GE continues to make progress in its transformation:
- Focusing on industrial core: The GECAS-AerCap combination announced in March is an important catalyst as GE becomes a simpler industrial company. In July, the European Commission cleared the transaction, which follows AerCap shareholder approval in May and the conclusion of the U.S. Department of Justice review in June. GE expects the transaction to close by the end of 2021.
- Solidifying financial position: Gross debt reduction following the AerCap close is expected to be more than $70 billion since the end of 2018, including a $7 billion debt tender in the quarter. GE reduced its backup credit facility to $10 billion from $15 billion. The company also continued to de-risk its pension, announcing a freeze in the U.K. beginning January 2022. GE discontinued most of its factoring programs effective April 1, 2021, to help the businesses improve operations and enable more linear cash flow over time.
- Accelerating lean and decentralization: GE’s lean transformation is driving progress across the businesses: faster turnaround times in Aviation Commercial Services, decreased installation cycle time in Healthcare Imaging, increased inventory turns in Onshore Wind, and improved outage on-time completion in Gas Power. GE named Peter Arduini as CEO of Healthcare and Jan Kjaersgaard as CEO of Offshore Wind. GE also promoted Scott Strazik to CEO of GE Power. Scott and his team, which now includes Valérie Marjollet as CEO of Steam Power, will continue running Power as four distinct businesses.
- Innovating for a more sustainable world and driving long-term value: GE is committed to partnering with customers to tackle the world’s biggest challenges through sustainable solutions, and released its 2020 Sustainability Report in July. The company is driving organic growth through commercial wins and services, new product introductions, and future technology innovation:
- Future of Flight: Launched CFM RISE, a new technology development program, aimed at reducing fuel consumption and CO2 emissions by more than 20 percent and ensuring 100 percent compatibility with Sustainable Aviation Fuels and hydrogen. Secured an order from IndiGo Airlines for 620 CFM International LEAP-1A engines and associated spares with a multi-year service agreement.
- Precision Health: Launched Xeleris V, an AI-enabled virtual processing radiology solution to provide simplified workflows, better data access, and more time with patients. Acquired Zionexa, a leading innovator of oncology and neurology biomarkers that enables more personalized healthcare.
- Energy Transition: Finalized contract to provide 87 Haliade-X 14 MW turbines for Dogger Bank C, the final phase of the world’s largest offshore wind farm. Will provide gas turbine technology for Tallawarra B Power Station, Australia’s first dual-fuel capable natural gas and hydrogen power plant. Will install high-voltage power transformers and reactors for Power Grid Corporation of India Limited, India’s largest transmission utility.