New York: General Electric recorded its highest orders in the last quarter of the year in key industrial sectors as it reported a profit in 2020 and is looking for further improvement in 2021, according to Tuesday’s results.
The industrial giant, which has been in a state of transformation after losses in the previous three years, forecast a jump in adjusted profit margins in 2021 with the expected improvement in the overall economy with the widespread use of coronavirus vaccines.
“Over the past year, our team has proven resilient, and momentum is growing across our business,” said CEO Lawrence Kolb.
“We are in leadership positions to seize opportunities in the energy transition, microscopic health, and the future of aviation.”
In the fourth quarter, General Electric reported profits of $ 2.4 billion, more than four times the level recorded in the same period last year, reflecting the benefits of cost-cutting initiatives.
Revenue decreased 14% to $ 22.1 billion.
General Electric reported a profit of $ 5.2 billion for the full year of 2020, compared to a loss of $ 5.4 billion the previous year.
The latest batch of quarterly results included a jump in energy demand to $ 5.6 billion, which was higher than the level in the third quarter as well as the fourth quarter of 2019.
The troubles of the energy division have been at the heart of GE’s multi-year recession, twice replacing its CEO and being removed from the prestigious Dow Index.
In the most recent quarter, General Electric also recorded an increase in demands in its renewable energy business.
However, orders were lower in the aviation sector amid the ongoing slowdown in the industry due to Covid-19, and in post-divestment healthcare.
Despite profitability, S&P Global Ratings has warned of General Electric’s debt that was 5.9 times its profits last year, which it attributed to the epidemic woes of the aviation division.
The agency expected its indebtedness to decline in 2021, but not if the epidemic continues and air travel does not recover.
S&P warned that “this could also happen in conjunction with a deeper-than-expected recession and the exacerbation of a prolonged recovery due to the dynamics of social distancing.”
General Electric shares closed 2.7% higher at $ 11.29 USD.