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Researched by Industrial Info Resources (Sugar Land, Texas)--Weaker-than-expected revenues, attributed largely to its oil and gas businesses, were among the factors that led to a sense of disappointment for General Electric (NYSE:GE) (Fairfield, Connecticut) for fourth-quarter 2016, despite a strong performance by its power-plant and renewable-energy businesses. But significant contributions from French power company Alstom, which GE acquired in 2015, and a pending merger with a major oilfield-services company have put executives in an optimistic mood for the near future. Industrial Info is tracking $57.14 billion in active projects involving GE and its GE Oil & Gas subsidiary.
Year-over-year comparisons were skewed by $3.76 billion in earnings from discontinued operations in fourth-quarter 2015; excluding this one-time factor, fourth-quarter 2016 showed a 38% earnings gain at $3.66 billion. But investors still expressed concern about a 2% decline in revenues (to $33.09 billion) that recent upticks in global oil prices were unable to prevent.
The company also reported a services and equipment backlog of $321 billion, a 2% increase from fourth-quarter 2015, with a 4% jump in new orders. Also during the quarter, GE agreed to merge its oil and gas business with Baker Hughes Incorporated (NYSE:BHI) (Houston, Texas), creating the second-largest oilfield services company in the world. GE believes the new "full-stream digital industrial services company," as it was called in a quarterly press release, will be more appealing to exploration and production companies in the Oil & Gas Industry.
The deal would add more than $19 billion in GE Oil & Gas projects tracked by Industrial Info to the more than $3 billion in Baker Hughes projects, creating a new, publicly traded company that would be controlled by GE. More than three-quarters of the investment value for projects involving GE Oil & Gas is attributed to projects along the booming U.S. Gulf Coast, including two proposed liquefied natural gas (LNG) export terminals from Venture Global LNG LLC: The $5 billion Plaquemine LNG Production & Export Terminal in Davant, Louisiana, and its $5 billion second-phase expansion, and the $2.5 billion Calcasieu LNG Production Terminal in Cameron, Louisiana, and its $2.5 billion second-phase expansion.
Both facilities are in their permitting phases, where plenty of factors could increase, decrease or eliminate the expected spending; as currently designed, each phase of the Plaquemine project would produce and export 10 million metric tons per year of LNG, while each phase of the Calcasieu project would produce and export 5 million metric tons per year. For more information, see Industrial Info's project reports on Plaquemine Phase I and Phase II, and Calcasieu Phase I and Phase II.
The largest projects involving Baker Hughes are abroad, including the construction of a $1.51 billion natural gas field subsea gathering system, which is part of Chevron Corporation's (NYSE:CVX) (San Ramon, California) $34 billion Wheatstone LNG project. The project, on which Baker Hughes' Australian subsidiary is a commissioning contractor, involves drilling nine subsea production wells and installing a gathering system to access natural gas from the Wheatstone and Iago fields in the Carnarvon Basin, to be transported through flowlines to the main platform. For more details, including scheduling and contractor contact information, see Industrial Info's project report.
"For the quarter, we had some pluses and minuses," said Jeff Immelt, the chairman and chief executive officer of GE, in a conference call. "Orders were strong ahead of our expectations. Service growth was very strong for both, revenue and orders. Alstom synergies are ahead of plan. Some businesses had very strong years: aviation, health care and renewable. On the negative side, we failed to close a couple of big power deals in tough markets. And in addition, restructuring exceeded gains for the year." He added that he was "particularly excited about the Baker Hughes merger which creates a strong full stream competitor in the industry."
The Power Industry segment was one of GE's better performers for the quarter and the year. Among the most prominent projects under construction is Footprint Power LLC's (Bridgewater, New Jersey) $750 million Salem Harbor Power Station in Salem, Massachusetts, a natural gas-fired, combined-cycle power plant that is among those replacing decades-old coal-fired facilities across the country. Footprint and its partners demolished the last remaining parts of Dominion Resources Incorporated's (NYSE:D) (Richmond, Virginia) last year, and GE is now providing two of its Flex Efficiency 60 combined-cycle, single-shaft power blocks. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Year-over-year comparisons were skewed by $3.76 billion in earnings from discontinued operations in fourth-quarter 2015; excluding this one-time factor, fourth-quarter 2016 showed a 38% earnings gain at $3.66 billion. But investors still expressed concern about a 2% decline in revenues (to $33.09 billion) that recent upticks in global oil prices were unable to prevent.
The company also reported a services and equipment backlog of $321 billion, a 2% increase from fourth-quarter 2015, with a 4% jump in new orders. Also during the quarter, GE agreed to merge its oil and gas business with Baker Hughes Incorporated (NYSE:BHI) (Houston, Texas), creating the second-largest oilfield services company in the world. GE believes the new "full-stream digital industrial services company," as it was called in a quarterly press release, will be more appealing to exploration and production companies in the Oil & Gas Industry.
The deal would add more than $19 billion in GE Oil & Gas projects tracked by Industrial Info to the more than $3 billion in Baker Hughes projects, creating a new, publicly traded company that would be controlled by GE. More than three-quarters of the investment value for projects involving GE Oil & Gas is attributed to projects along the booming U.S. Gulf Coast, including two proposed liquefied natural gas (LNG) export terminals from Venture Global LNG LLC: The $5 billion Plaquemine LNG Production & Export Terminal in Davant, Louisiana, and its $5 billion second-phase expansion, and the $2.5 billion Calcasieu LNG Production Terminal in Cameron, Louisiana, and its $2.5 billion second-phase expansion.
Both facilities are in their permitting phases, where plenty of factors could increase, decrease or eliminate the expected spending; as currently designed, each phase of the Plaquemine project would produce and export 10 million metric tons per year of LNG, while each phase of the Calcasieu project would produce and export 5 million metric tons per year. For more information, see Industrial Info's project reports on Plaquemine Phase I and Phase II, and Calcasieu Phase I and Phase II.
The largest projects involving Baker Hughes are abroad, including the construction of a $1.51 billion natural gas field subsea gathering system, which is part of Chevron Corporation's (NYSE:CVX) (San Ramon, California) $34 billion Wheatstone LNG project. The project, on which Baker Hughes' Australian subsidiary is a commissioning contractor, involves drilling nine subsea production wells and installing a gathering system to access natural gas from the Wheatstone and Iago fields in the Carnarvon Basin, to be transported through flowlines to the main platform. For more details, including scheduling and contractor contact information, see Industrial Info's project report.
"For the quarter, we had some pluses and minuses," said Jeff Immelt, the chairman and chief executive officer of GE, in a conference call. "Orders were strong ahead of our expectations. Service growth was very strong for both, revenue and orders. Alstom synergies are ahead of plan. Some businesses had very strong years: aviation, health care and renewable. On the negative side, we failed to close a couple of big power deals in tough markets. And in addition, restructuring exceeded gains for the year." He added that he was "particularly excited about the Baker Hughes merger which creates a strong full stream competitor in the industry."
The Power Industry segment was one of GE's better performers for the quarter and the year. Among the most prominent projects under construction is Footprint Power LLC's (Bridgewater, New Jersey) $750 million Salem Harbor Power Station in Salem, Massachusetts, a natural gas-fired, combined-cycle power plant that is among those replacing decades-old coal-fired facilities across the country. Footprint and its partners demolished the last remaining parts of Dominion Resources Incorporated's (NYSE:D) (Richmond, Virginia) last year, and GE is now providing two of its Flex Efficiency 60 combined-cycle, single-shaft power blocks. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
