GENERAL ELECTRIC'S annual accounts reveal that its aircraft-engines division turned in a lacklustre performance in 1994, but hopes to lift profits significantly over the coming year.
Sales were down again by 13% on the year, at around $5.7 billion, with revenues from US Government business down by one-quarter because of scaled-down F110 jet and T700 helicopter programmes.
Although operating profits showed a nominal improvement to $935 million, GE points out that this was because of the heavy restructuring charges which artificially depressed the 1993 result. Taking these out of the equation, underlying profits were down by 16%.
Since restructuring began, the business has shed 16,000 jobs, or 40% of the total. GE expects to see these cost cuts show through in 1995, says chief executive Eugene Murphy. "We are committed to significant growth in earnings on a modest increase in revenues," he says.
The company's order backlog was maintained at $7.6 billion, with at least $2.4 billion of these orders scheduled for delivery this year.
By comparison, Pratt & Whitney continued its climb back to profit in 1994, ending the year with $380 million in operating earnings, representing a margin of just under 7%.
The target is for a 13% margin by 1998. The target also calls for compensation of core engine sales by the revenue growth in overhaul and repair to above $1 billion. The goal for industrial and marine is for revenue to rise above $350 million.
GE's other main aero-engine rival, Rolls Royce of the UK, achieved profits of £34 million ($54 million) from its aerospace business in 1994, despite an 8% fall in sales to under the £2 billion mark.
Source: Flight International
