GE Withdraws Aggressive Cleantech Sales Goal
Date: 28-Jun-10
Country: USA
Author: Scott Malone
General Electric Co abandoned its $25 billion sales target for its energy-saving products, but said it would double its investment in cleantech research and development.
The largest U.S. conglomerate said on Thursday that it now aims to grow sales of green products, which last year hit $18 billion, at twice the rate of overall corporate sales. In its annual "Ecomagination" report, the company backed off from an ambitious goal of $25 billion in annual revenue by 2010 that it had set last year.
"Going forward, we're looking at a more sustainable, continuous commitment on revenue growth as opposed to a one point in time out into the future when so many things can change," said Steve Fludder, vice president of the Ecomagination push, which encompasses a range of GE products, from wind turbines to fuel-efficient jet engines.
GE has stopped giving investors specific profit and revenue targets, instead providing a "framework" of how it expects its various businesses to perform. Analysts, on average, expect GE's 2010 revenue to be roughly flat with 2009 level and to decline about 1 percent in 2011, according to Thomson Reuters I/B/E/S.
Ecomagination revenues, which stood at about $6 billion in 2004, rose 6 percent last year. The company last year adopted the $25 billion by 2010 goal, which it described as a "stretch" goal and replaced an earlier $20 billion by 2010 target.
Still, Fludder said he expects Ecomagination businesses -- which also include products like energy-efficient appliances and compact-fluorescent lightbulbs -- to remain an important growth vehicle for GE in the future.
"We're going to commit to revenue growth that is going to be at least twice the company growth rate, but I think there are going to be years when it's going to be higher than that," Fludder said.
GE, which has invested about $5 billion in cleantech R&D since launching the Ecomagination initiative in 2005, aims to spend another $10 billion on developing energy-efficient and green products over the next five years.
The Fairfield, Connecticut-based company has lowered its greenhouse gas emissions by about 22 percent from its 2004 level and aims to cut overall emissions by 25 percent by 2015.
The push toward energy efficiency has resulted in annual operating cost savings of about $150 million.
(Editing by Leslie Gevirtz)
