GE released its fourth quarter and full year 2022 financial results today, and I encourage you to read the full materials and
listen to our earnings call
at 8:00 AM ET.
Key highlights on GE’s financial performance for the fourth quarter 2022:
- Total orders $25.4B, +15%; organic orders +18%
- Total revenues (GAAP) $21.8B, +7%; adjusted revenues* $21.0B, +11% organically*
- Profit margin (GAAP) of 10.3%, +2740 bps; adjusted profit margin* 10.3%, +290 bps organically*
- Continuing EPS (GAAP) of $1.99, +$5.23; adjusted EPS* $1.24, +$0.42
- Cash from Operating Activities (GAAP) $4.6B, +$2.2B; free cash flow* $4.3B, +$0.6B
Key highlights on GE’s financial performance for the full year 2022:
- Total orders $83.0B, +4%; organic orders +7%
- Total revenues (GAAP) $76.6B, +3%; adjusted revenues* $73.6B, +6% organically*
- Profit margin (GAAP) of 1.8%, +680 bps; adjusted profit margin* 7.9%, +160 bps organically*
- Continuing EPS (GAAP) of $0.53, +$3.78; adjusted EPS* $2.62, +$0.91
- Cash from Operating Activities (GAAP) $5.9B, +$5.0B; free cash flow* $4.8B, +$2.1B 1
GE Chairman and CEO and GE Aerospace CEO H. Lawrence Culp, Jr. said, "2022 marked the beginning of a new era for GE. We successfully launched GE HealthCare, delivered strong financial performance, made significant operational progress, and continued our steadfast commitment to our customers. Thanks to the high quality work of our team, GE ended the year with solid revenue growth and margin expansion, and $4.8 billion of free cash flow. In the fourth quarter, this was led by strong results at GE Aerospace with order and revenue growth above 20 percent, as well as Power with double-digit growth. In addition, we further strengthened our foundation, surpassing $100 billion in debt retired since 2018 and improving our operations by more deeply embedding lean and decentralization across GE."
Culp continued, "Looking ahead, GE is positioned to drive growth, profit, and cash, and our outlook reflects our confidence in our businesses. In GE Aerospace, we are executing on an unprecedented ramp, and our best-in-class technology is powering more efficient and sustainable flight. In GE Vernova, Power is delivering with Gas Power stable, and Renewable Energy is taking action to drive operational improvements as it also begins to benefit from external catalysts like the Inflation Reduction Act. As a result, we expect high-single-digit revenue growth and strong free cash flow generation in 2023 for GE. We are making good progress on our plans to launch these independent, investment-grade, industry-leaders that will unlock greater value for our customers and shareholders."
For the year, we delivered 6% organic revenue* growth, +160 bps of organic margin* expansion, $2.62 of adjusted EPS*, and $4.8B of FCF* amidst a challenging external environment. Strong Aerospace performance led the way with greater than 20% growth in both orders and organic revenue* in the fourth quarter and for the full year. Power also delivered double-digit orders and organic revenue* growth in the quarter. We strengthened our foundation, retiring an additional $11B in debt, bringing our total debt reduction to more than $100B since 2018.
Looking across the businesses, Aerospace is executing on an unprecedented ramp for customers. Order growth in the quarter was driven by robust equipment orders primarily in Military. Organic revenue* grew 26% and LEAP engine deliveries grew year-over-year. For the full-year, margin expanded 440bps organically* and FCF* was $4.9 billion, largely driven by earnings and working capital. We're making progress on lean—improving process capabilities and vertically integrating our P&Ls to drive greater portfolio focus. At the same time, we're investing in differentiated, technology programs to advance the future of flight such as LEAP, CFM RISE, and the XA100.
At GE Vernova, Power delivered with solid earnings and cash performance, and demand remained robust with organic orders up double-digits driven by continued aeroderivative momentum at Gas Power. We're taking significant actions to position Renewable Energy for future profitability, driving operational improvements while external catalysts, such as the Inflation Reduction Act, begin to show benefits. Orders were up high-single digits organically with strong growth in Onshore in North America, and we're executing on our Onshore restructuring plan, which will deliver savings in '23. Additionally, Grid achieved profitability in the quarter and we expect will be modestly profitable in '23. Power's continued investment in decarbonization technologies and key external catalysts set to fuel Renewable Energy demand, will enable GE Vernova to lead in the energy transition and create long-term value as we drive progress on our planned spin.
While the team remains focused on operational improvements, we also saw a number of commercial wins within the quarter. GE Aerospace's entered an equipment and long-term support agreement with Cargolux for their GE-powered Boeing freighter fleet. And Power secured an order from the Swiss Federal Office of Energy to provide a reserve power plant through 2026.
Looking to 2023, our outlook, which excludes GE HealthCare, includes high-single-digit organic revenue* growth, adjusted EPS* of $1.60-$2.00 (more than doubling our '22 jumping off point), and FCF* of $3.4B-$4.2B.
Finally, I'm pleased to note that we plan to host our annual Investor Conference on March 9th. During the event you'll hear from Larry, Scott, and other members of our senior leadership team as they share further details on our 2023 outlook and how GE Aerospace and GE Vernova are poised to shape their respective industries.
Thank you for your continued interest in GE. We look forward to keeping you updated on the business.
1 Excludes prior period CFOA impact from discontinued factoring programs
*Non-GAAP Financial Measure. The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures are included in our annual report on Form 10-K and our fourth quarter earnings release.
This document contains "forward-looking statements." For details on the uncertainties that may cause our actual future results to be materially different than those expressed in our forward-looking statements, see here as well as our Annual Report on Form 10-K for the year ended December 31, 2021 and our Quarterly Report on Form 10-Q for the quarter ended October 31, 2022, as such descriptions may be updated or amended in any future reports we file with the SEC.