Credit: Shutterstock photoGeneral Electric CompanyGE and Hitachi, Ltd. HTHIY recently entered into a definitive agreement with a provider of nuclear components, BWXT Canada Ltd. ("BWXT Canada") to divest the GE Hitachi Nuclear Energy Canada Inc. ("GEH-C") unit for an undisclosed amount. The deal is expected to close by the end of 2016.
Headquartered in Lynchburg, VA, BWX Technologies, Inc. BWXT is a power generation company, supplying precision manufactured components and services to the commercial nuclear power industry. The company offers technical, management and site services to governments in complex facilities and environmental protection activities. A subsidiary of the company, BWXT Canada has an impressive track record of providing sustained nuclear power generation services in Canada.
For over 60 years, GEH-C has a rich history of providing extensive innovation and expertise in the industry, especially in CANDU nuclear power industry. The company employs around 350 skilled employees across three major locations, namely Ontario, Peterborough, Toronto and Arnprior. This transaction will augment BWXT Canada's business with an extended portfolio. Per the deal, the company will also absorb GEH-C's employees.
Despite volatility in the energy sector along with macroeconomic issues, General Electric reported a 31% year-over-year increase in revenues to $6,639 million in the second-quarter of 2016 from the Power sector. The continued focus on operational improvements to reduce costs has been a major reason for this gain.
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General Electric is actively pursuing its massive restructuring initiatives in order to create a simpler and nimbler firm. From a classic conglomerate with diversified business interests in financial services, media, industrial and technology-based operations, the company is pruning its operating portfolio to focus on core manufacturing businesses with a digital edge.
Earlier this year, General Electric completed the divesture of its appliance business to Haier Group, a Chinese multinational consumer electronics manufacturing firm. The transaction unlocked incremental value by allocating more resources to high-growth core industrial businesses.
The company continues to exit from the financial business and has increased its investments in core industrial businesses through restructuring, state-of-the-art technology, and R&D initiatives. We remain encouraged by the restructuring endeavors.
General Electric currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same space includes Barloworld Ltd. BRRAY , holding a Zacks Rank #2 (Buy).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
