General Electric Company's Most Important Product Faces Competition

General Electric Company's Most Important Product Faces Competition

Power matters to General Electric Company (NYSE: GE). The segment generated more than 28% of industrial profit in 2016 and is GE's best-known activity, with gas turbines being its most important product. Indeed, GE's success with its market-leading H-class turbine has broken world records for efficiency and driven order growth at the segment. That said, there are reasons to believe GE might come under pressure in the future, and here's how and why it matters.

Power is traditionally GE's most important segment, and its new H-class turbines (known as the 9HA) are important for four reasons. First, GE's management and key rival Siemens AG (NASDAQOTH: SIEGY) both acknowledge there is overcapacity in the gas turbine market and the HA turbine has been critical in driving growth.

Second, orders for GE's E- and F-class gas turbines (older technologies that tend to produce smaller output) appear to be declining significantly, so GE needs HA orders even more.

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Source: Fool.com