'GE Lighting is not for sale,' said Beth Comstock, chief marketing officer and senior vice president for $146 billion parent GE, in an email.
Bloomberg reported yesterday that Lighting could be the next to go as GE hives off lower-margin units such as its home appliance division, which Sweden's AB Electrolux purchased this week for $3.3 billion.
The news service based its story on comments from Nicholas Heymann of Chicago-based analyst firm William Blair & Co. who said that the division could fetch as much as $1 billion.
'Lighting is the next piece of the classic GE businesses that are not a critical part of the refocus on infrastructure-related businesses,' Heymann said in the Bloomberg story.
Since last year, GE has also completed the sale of its NBC Universal media and film business, as well as its credit card business. Several years ago it sold its giant plastics division.
Under CEO Jeffrey Immelt, Fairfield, Connecticut-based GE is focusing on higher margin industrial goods and services. Like William Blair's Heymann, analyst Jim Corridore of Standard & Poor's Capital IQ also pointed out to Bloomberg that lighting is no longer part of the core portolio.
But elaborating on Comstock's denial of a sale, a GE spokesman told Lux, 'I would affirm that Lighting stays part of the Industrial portfolio and is well-positioned to excel based on the growth trends in the industry. Seventy percent of our sales in Lighting are to industrial/commercial customers.'
GE, like other major lighting companies, has had to shift its business away from inefficient incandescent bulbs as governments have implemented bans on them in recent years. Instead, GE is spending on development of more energy efficient technologies such LEDs (light emitting diodes).
The company does not break out lighting revenues in its financial statements, but has lumped them in with revenue for homes appliances such as washing machines and toasters, which are now part of Electrolux, where the GE brand will join AEG, Frigidaire, Zanussi and others.
Financial results for Ohio-based GE Lighting should now become more transparent.
In its latest yearly financial statememt, GE showed revenue in appliances and lighting of $8.3 billion, but profits of only $381 million – a profit percentage of about 4.5 percent well below the double figures of compared to well below the performance of industrial groups like power and water, oil and gas, aviation and transportation.
For example, the power and water business showed proifts of $5 billion on revenue of $24.7 billion; aviation showed $4.3 billion on $21.9 billion; and transportation about $1.2 billion on revenue of about $5.9 billion.
Bloomberg reported that 'GE’s lighting business employs about 13,000 people and had sales of $2.7 billion last year, or about 2 percent of total revenue, according to the company.'
A move out of lighting would be a landmark shift for GE, which has been associated with light bulbs since inventor Thomas Edison founded an early version of the company in 1889.
Top: A bridge from past to future? While GE is selling off some traditional businesses, it says it is sticking with its oldest of all - lighting - as it develops new techologies like LEDs. For now, watch for more GE Lighting projects such as London's Tower Bridge. Image is from Simon Kennedy via GE.
Middle: Eye on innovation. GE senior vice president Beth Comstock oversees partnerships in innovation and startups. What's next in Lighitng? Image is from GE.