BOSTON — More than a year after the COVD-19 pandemic crimped air travel, General Electric continues to feel the impact in its previously-lucrative Aviation business, and company revenue was dragged down as a result.
The conglomerate announced its first-quarter 2021 financial report Tuesday, and CEO H. Lawrence Culp Jr. called it a solid start to the year that set up GE to meet its 2021 goals and achieve long-term profitable growth.
GE Aviation has shed approximately 25% of its workforce since January 2020, but that has not counterbalanced its losses. Aviation revenue was down 26% in the first quarter of 2021 from a year earlier, revenue was down 28% and segment profit was down 36%.
GE is watching travel restrictions, customers’ behavior, COVID trends, vaccine impact, booking rates and air freight volumes for indications of Aviation’s prospects for the rest of the year.
Culp said improvements in most of GE’s other businesses helped offset Aviation’s struggles.
GE’s stock price peaked at a nearly three-year high last month, closing at $14.17 on March 8. After the first-quarter earnings were announced Tuesday, the stock opened lower then gradually regained value in heavier-than-normal trading to close at $13.49 per share, down from $13.57 Monday.
“In all, we’re seeing continued progress, especially on margins and cash flow, and we believe these improvements are sustainable,” Culp said. “As we look to the second quarter, we expect industrial free cash flow growth of similar magnitude to what we saw this quarter.”
Some specific highlights:
- GE Renewables secured the largest onshore wind project in its history, a 530-turbine Oklahoma project, which will help sustain its No. 1 rank in the North American onshore market.
- Healthcare launched two new ultrasound solutions, the Vscan and Venue, the industry’s first artificial intelligence solution for cardiac imaging.
- The commercial air fleet powered by more than 37,000 GE engines is on average a young fleet, with promise for significant revenue from maintenance once air travel returns to its previous levels.