GE reports net loss, decreased revenue amid challenges of 2021

The General Electric Plant as seen from Erie Boulevard in Schenectady. 
PHOTOGRAPHER:

The General Electric Plant as seen from Erie Boulevard in Schenectady. 

BOSTON — General Electric on Tuesday offered an optimistic forecast for 2022 as it presented a not-great financial report for 2021.

The company said its revenue shrank and it sustained a net loss for both the fourth quarter and entire year of 2021 compared with 2020.

The financial markets were not impressed: In heavy trading, GE’s per share price dropped 5.98% on a day when the S&P 500 was down only 1.22% in average trading volume.

GE’s stock price closed at $91.11 per share, its lowest close in 11 months.

Financial details reported for the four quarters of 2021 include:

  • Orders worth $79.4 billion, 10% more than in 2020;
  • Revenues of $74.2 billion, down 2% from 2020;
  • Earnings per share of -$3.25, compared with +$5.46 in 2020;
  • Profit margin of -5.0%, compared with +7.9% in 2020.

Speaking with financial analysts Tuesday morning,  Chairman and CEO H. Lawrence Culp said the same factors that affected many other companies weigh on GE as well, including supply chain delays. 

He said General Electric continues to prepare for the breakup of the conglomerate into three companies — Aviation, Healthcare and a Power entity consisting of the current GE Power, GE Renewable Energy and GE Digital businesses. 

Healthcare is targeted to break off in early 2023, the others in early 2024.

One industry analyst asked Culp about the stability of the components of the three planned businesses, and whether the breakup could be speeded up or would need to be slowed.

Culp replied that he prefers to think of it as three spinoffs rather than one breakup.

“It’s really been, what, 77 days since we announced the spins. I tend to use that framing as opposed to something that has a sadder context like breakup, right? … But all in, we simply have to go through the work, right, over the next year to prepare this business to be independent. And I think if you could just snap your fingers operationally, that would be — that would take less time, but there’s a lot of legal and structural financial systems and the rest that we need to work through. So net-net, the plan of record remains today early ’23 [for Healthcare]. If we can get that work done more quickly, rest assured, I think we’d be motivated and keen to do that.”

General Electric has three facilities in the Capital Region: Its sprawling campus on the Schenectady/Rotterdam border, home mainly to Power and Renewable operations; the world headquarters of its research and development efforts, in Niskayuna; and a small Healthcare manufacturing site outside Troy. 

Their workforces are a small fraction of the army of employees GE once had in and near Schenectady, where the company was born in 1892.

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