How GE Makes a Profit?
Dec 06, 2023 By Triston Martin

It is a multinational industrial organisation that provides power generation, renewable energy, industrial aviation equipment and healthcare products and services. The organisation provides financial products and services, but its number has dropped dramatically in recent years.

GE serves customers in more than 130 countries with a wide range of products and services. A continual flow of R&D expenditures is required in the domains where GE operates 3M Co., Siemens AG, Honeywell International Inc., and Schneider Electric SE, all of which are headquartered in France, are all critical rivals in their respective markets (SBGSF).

As of November 9, 2021, General Electric will be split into three publicly traded companies, each representing one of its three business segments: aviation, healthcare, and energy. A healthcare spinoff is expected to take place in 2023. The early 2024 energy business spinoff will comprise wind turbine power stations and wind farms. Next, GE will concentrate on its aviation business.

GE's Balance Sheet

In January, GE made public its financial results for the fourth quarter of its FY 2021, which ended on December 31, 2021. In the most recent quarter, shareholders lost $3.9 billion, compared to a profit of $2.4 billion in the same period the previous year. At $20.3 billion, total revenues were down 3.5 per cent from 2013.

Since each company's industrial business division and corporate sector achieved their own segment profits, GE's fourth-quarter segment profit was $2.5 billion, down 33.3% from last year. When the corporate section was eliminated, the company's total segment profit climbed YOY by 14.3% to $2.0 billion.

The company's FY 2021 earnings release emphasised profit margins, EPS, and free cash flow (FCF). They blamed the decline in sales on supply chain problems and other things. There are signs that the company's aviation segment is returning, though.

GE's business divisions

Aviation, healthcare, renewable energy, and power are all divisions of GE. Section profit and revenue are broken down for each business segment plus a separate Corporate segment. There is no revenue or profit in the pie charts previously indicated.

Aviation is responsible for commercial and military aircraft engines, engine integration, electric power, and mechanical aircraft systems. As a bonus, the company also offers aftermarket services.

At $1.2 billion for the fourth quarter of fiscal 2021, Aviation's earnings were up 116.0% from the same period in 2018. It generated 43 per cent of industry earnings (including profit from the Corporate segment). A sizable chunk of the company's total revenue, which climbed 4.0% year-over-year to $6.1 billion in the third quarter, comes from this business segment.


The healthcare business sells high-end medical equipment and supplies. These include imaging, digital solutions, patient tracking, diagnostics, medicinal research and performance enhancement. Hospitals and other medical facilities worldwide purchase them for their use.

The Healthcare segment profit declined by 19.7% to $762 million in Q4 FY 2021, accounting for 27% of the segment profit as a whole (Q4 FY 2021). (including corporate segment profits). Around 23% of total revenue was accounted for by sales that fell 4.1% year over year to $4.6 billion during the third quarter.

Power derived from renewable resources

Products, services, and integrated solutions for renewable energy generation are available through the Renewable Energy business.

Q4 FY 2021 ended with a loss of $312 million, an increase of $87 million from the previous year. About 21% of total revenue came from this area, with a 5.6% year-over-year revenue decline to $4.2 billion.

Power The Power segment provides products and services related to energy production. Its products and technologies also use nuclear power to generate electricity. This GE division provides gas and steam turbines and a complete balance of plant, upgrade, and service solutions.

Profits from the Power business climbed by 1% year-over-year to $309 million in the fourth quarter of the fiscal year 2021. Nearly ten per cent of the segment's total profits (including corporate segment profits). To put it another way, YOY revenue fell by 13.4% to $4.7 billion. Overall, 23% of the company's revenue was generated by just one product.

Corporate Other expenses, such as those associated with GE's primary retirement plans and high-cost restructuring initiatives but not included in operating division results, are included in corporate earnings. This category includes the results of GE Digital and the remaining GE Capital operations.

During the fourth quarter of the fiscal year 2021, corporate profits fell by 73.8% to $531 million from the previous year's level. About 19% of the section's profits were derived from it in the year's third quarter. As a percentage of overall sales, revenues from this category climbed by 38.5% year over year to $745 million.