General Electric Company (NYSE:GE) Q3 2018 Earnings Conference Call Transcript
Oct 30, 2018 • 08:00 am ET
Good day, ladies and gentlemen, and welcome to the General Electric Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. My name is Brandon and I'll be your operator for today. (Operator Instructions)
I would now like to turn the program over to your host for today's conference, Todd Ernst, VP of Investor Communications. Please go ahead, sir.
Thank you, Brandon. Good morning, everyone, and welcome to GE's third quarter earnings webcast. I'm joined this morning by our Chairman and CEO, Larry Culp; and CFO, Jamie Miller. Before we start, I'd like to remind you that the press release, presentation, supplemental, and 10-Q have been available since earlier today on our investor website at www.ge.com.
(Forward-Looking Cautionary Statements)
And now, I'll turn the call over to Larry. Larry?
H. Lawrence Culp
Todd, thanks. Good morning, everyone, and thank you for joining us. We have a lot to share with you, so let's get to it. During the third quarter, we saw positive results in most segments with outstanding performance in our Aviation business and strong results in Healthcare which was unfortunately offset by weakness in Power. Our overall orders were up 13% organically with service orders up 5%. Core revenue was up 1% organically with increased commercial engine shipments in Aviation, onshore wind turbine deliveries in Renewables, and, in Healthcare, we saw growth in our (ph) developed markets and in Life Sciences. Adjusted EPS was $0.14 and GAAP continuing EPS was a negative $2.63 which includes the (Technical difficulty) Our adjusted Industrial free cash flow was $1.1 billion.
Now I know there's been renewed speculation on our future strategic direction. The strategy we announced on June 26 to create a more focused portfolio that sets up our businesses to win and strengthening our balance sheet is today the right plan going forward. Consistent with the strategy, we are announcing two actions this morning. First, GE plans to reduce its quarterly dividend from $0.12 to $0.01 per share beginning with the board's next dividend declaration which is expected to occur in December 2018. This change will GE to retain about $3.9 billion of cash per year compared to the prior payout level. Going forward, we will target a dividend payout ratio in line with peers over time.
Second, we will take a materially different approach to running our Power business. The past 30 days I've spent a lot of time with Russell Stokes and his team. It has become clear to us that we need to simplify the business structure. Therefore, today, we are announcing our intent to reorganize Power into two units, both of which will report directly to me. The first is a unified gas lifecycle business combining our product and services group, Gas Power Systems and Power Services, with the second constituting the portfolio of Steam, Grid, Nuclear, and Power Conversion. Additionally, we intend to consolidate the Power headquarters, Gas Power Systems and Power Services teams into the new gas lifecycle business effectively eliminating the