General Electric has spent the last year undertaking one of the most radical transformations the company has seen in its 124-year history, shedding financial assets and aligning its business around software and industrial products.
One clear winner from the shakeup: renewable energy.
In first-quarter earnings reported Friday, General Electric booked a 62 percent increase in revenue from renewable energy, which totaled $1.7 billion for the first three months of the year. Growth in the renewable segment, which topped gains in any other part of GE’s business, accounted for 40 percent of total revenue growth across the company.
Those gains proved a bright spot in an otherwise challenging quarter, with headwinds from unfavorable exchange rates and a continued energy slump hammering revenue from oil and gas technologies. Overall, profits slipped $98 million, edging out analysts’ gloomier expectations.
GE deepened its focus on renewable energy last year with its acquisition of a $10 billion power business from France’s Alstom SA, which was finalized in November. The deal added 50 percent to GE’s installed power base, including Alstom’s extensive wind energy and turbine segment.
“We are already seeing valuable synergies from the Alstom acquisition,” Chief Executive Jeff Immelt told investors Friday.
After the deal, GE split off GE Renewables as a separate segment in its financial reports. Though it remains a small part of GE’s overall business — earning just 2.5 percent of overall industrial profits — the segment reported the highest profit growth of any GE division. Orders of wind turbines nearly doubled year over year.
The renewables success comes as the energy industry grapples with an ongoing slump in oil and gas prices that has forced drillers to idle rigs and refiners to pare back their output. As a result, GE’s Oil & Gas unit, which produces drilling and pipeline machinery, has suffered a 37 percent plunge in profits year over year. Though GE Renewables currently produces just half the revenue of GE Oil & Gas, it occupies a prime place in the accelerating market for renewable energy technologies.