Here's one company that may be benefitting from the GE meltdown
The dismantling of the once mighty industrial powerhouse General Electric (GE) continues to fill the coffers at long-time bestie Genpact (G).
Genpact, a professional services firm that focuses on tech outsourcing, risk management and analytics, was founded inside GE back in 1997. It was spun off in 2007, but has retained its close ties with GE to handle various back office and tech services.
The company continues to benefit from that special relationship with its former parent. In fact, an argument could be made that Genpact is benefiting even more now amidst GE’s struggles that have new CEO Larry Culp selling off assets and seeking ways to slash costs.
Genpact’s GE-related sales spiked 86% from the prior year in the second quarter, representing about 14% of total revenue. Executives pointed to greater “transformation service project engagements” for the GE-driven sales spike. In other words, GE views Genpact as an enabler of its efforts to run a better business after years of corporate bloat and mismanagement.
“We understand the business, we understand the processes that GE has. As GE has undertaken its next change journey, they came to us and said do a slug of work that sits on top of what we already do for them,” said Genpact President and CEO N.V. ‘Tiger’ Tyagarajan on Yahoo Finance’s The First Trade.
“GE is undergoing a significant transformation. People like us are part of the change journey that GE undergoes along with many other people they are working with,” added Tyagarajan.
Pipeline of work is strong
Genpact isn’t completely levered to GE (a good thing long term), however.
The company has won a host of big accounts these past few quarters, such as one with Walmart (WMT), to drive automation in the accounting and finance department. Second quarter sales at Genpact’s global clients business segment rose 15%, and made up roughly 86% of the business.
Genpact says its pipeline of work has never been stronger.
Tyagarajan recently raised Genpact’s full-year earnings guidance to $2.00 to $2.02 a share from $1.96 to $2.00 previously. Shares have responded in lockstep with the obvious momentum in the business — up 55% year-to-date.
Brian Sozzi is an editor-at-large and co-host of The First Trade at Yahoo Finance. Follow him on Twitter @BrianSozzi
Read the latest financial and business news from Yahoo Finance
Dunkin' enters the plant-based meat craze by joining forces with Beyond Meat
Beyond Meat founder: We are working on meatless bacon and steak
Why Chipotle hasn't joined forces with plant-based meat kings Impossible Foods and Beyond Meat
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.
