GE's overall profit for the energy sector in the fourth quarter was down 3% on the previous year at $1.67 billion, and Sherin, speaking to analysts at a results presentation on Friday, blamed this fall on the wind sector, saying that growth in both order and sales volumes had failed to make up for the fall in turbine prices and profit margins.
GE's overall profit for the energy sector in the fourth quarter was down 3% on the previous year at $1.67 billion, and Sherin, speaking to analysts at a results presentation on Friday, blamed this fall on the wind sector, saying that growth in both order and sales volumes had failed to make up for the fall in turbine prices and profit margins.
Falling turbine prices and a subsequent drop in profit margins in GE's wind business acted as a "drag" on the entire company's profits, according to GE chief financial officer Keith Sherin.
Renewable-energy orders in the fourth quarter of 2011 were $2 billion, up by 53% compared to the same period in 2010, with 1,023 wind turbines ordered compared to 477 in Q4 2010.
Meanwhile revenue for renewables was $1.6 billion, up 15% on the fourth quarter of 2010, with 688 wind turbines shipped versus 592 in the last quarter of 2010. For the entire year, GE shipped 1,956 turbines, up 5% year on year.
However, GE's overall profit for the energy sector in the fourth quarter was down 3% on the previous year at $1.67 billion, and Sherin, speaking to …
... more [truncated due to possible copyright]Falling turbine prices and a subsequent drop in profit margins in GE's wind business acted as a "drag" on the entire company's profits, according to GE chief financial officer Keith Sherin.
Renewable-energy orders in the fourth quarter of 2011 were $2 billion, up by 53% compared to the same period in 2010, with 1,023 wind turbines ordered compared to 477 in Q4 2010.
Meanwhile revenue for renewables was $1.6 billion, up 15% on the fourth quarter of 2010, with 688 wind turbines shipped versus 592 in the last quarter of 2010. For the entire year, GE shipped 1,956 turbines, up 5% year on year.
However, GE's overall profit for the energy sector in the fourth quarter was down 3% on the previous year at $1.67 billion, and Sherin, speaking to analysts at a results presentation on Friday, blamed this fall on the wind sector, saying that growth in both order and sales volumes had failed to make up for the fall in turbine prices and profit margins.
"Now, while being down 3% is a great improvement over the third quarter year-to-date result of down 20%, the main drag continued to be our wind business, which accounted for $41 million of the $44 million year-over-year operational profit decrease," said Sherin.
In addition to falling profits, revenue from wind-turbine sales and installations was hit by delays to a number of schemes, pushing $400 million of revenue into 2012.
"We had wind units in Canada that didn't get to revenue that we thought we were going to get, that will come in '12," said Sherin.
"We also had some pushouts on installations for about another 200. So, there is about $400 million of things that we did not record that we thought we were going to and that moved into the next year."
Despite these problems, Sherin is confident about 2012 with the large levels of orders secured in 2011 meaning the firm expects to ship in excess of 3,000 units in 2012, compared to 1,956 in 2011.
"You know, the energy team has worked through the toughest part of the earnings cycle, mainly driven by the 2011 wind margin declines," said Sherin.