GE Wind Energy Biz Down 8%, Announcing Big China Smart Grid Order Next Week

General Electric (GE) reported earnings Friday morning and I’ve now had a chance to go through the entire earnings report provided by Seeking Alpha and pick out all portions related to their smart grid wind turbine businesses.  Overall, their Energy unit was the strongest performer with revenues up 7%  and profits up 19%  Unfortunately, that wasn’t due to wind turbine orders which were down 8% for the quarter.  Although, when you consider that the 1st quarter 09 was/is supposed to be the worst quarter for the alternative energy biz, all in all not too shabby.  There was no word on the financial details of their smart grid business that I could see.  Anyone out there know this info?

CEO Jeff Immelt on the government stimulus:

And in that context I thought I’d give you an update on what we’re seeing on stimulus. You know, once again, this is going to take some time for the projects to translate to income, but we are seeing activity. On the left-hand side, about $2 trillion of stimulus has been announced. GE is targeting in nine regions – U.S., Canada, China, Japan, Brazil, U.K., France, Germany, Middle East. We’ve got a real strong team and process in place. You’re going to see several big projects break in the second quarter. And we’ve got a pipeline of about $100 billion plus in opportunities.

On the right-hand side I thought I’d just take you for a walk on how global and how broad-based these activities are. You know, the first one has a lot to do with wind in terms of stabilizing the backlog and solidifying the 2009 projects and then building the backlog in ’10 and ’11. You’re seeing projects like Invenergy. There was one in Missouri yesterday funded by the Wind Capital Group. So you’ve seen three or four in the last few weeks and we think that’ll pick up during the rest of the year.

And in China, their stimulus is actually accelerating our wind demand. They’re accelerating green energy investing like the smart grid. From your perspective, a 1 million population city is about $500 million in GE content in the smart grid. And you’ll see a big deal on this next week in a big city where this technology is going to be applied by GE.


Daniel Holland – Morningstar

And just one more question on actually wind. There’s been a lot of press releases, things like that, regarding new wind out there. I’m kind of curious if you guys have seen a material pickup in activity, not necessarily on orders but just more quoting kinds of things, things like that, in the last little bit here?

Jeff Immelt

I think the thing that’s really picked up in the last month is that commitments that might have slipped out of the year because of lack of financing have now started to firm up. And so I think that’s the encouraging piece because people see on the horizon that the credit markets are opening up to finance them and that the stimulus is going to have some advantages for them.

So I actually think that the shipments in ’09 will improve in wind even while you might not see new projects announced just because there was such a lot of activity in ’06, ’07, ’08.

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