Having acquired Alstom, GE has expanded its wind power offerings. Image source: GE.

Another earnings season is upon us. As investors pore over quarterly and annual earnings statements, one subject remains at the forefront of the market's focus -- energy. Let's look at General Electric's (GE -3.19%) fourth quarter earnings to see how the company's energy-related segments performed.

Viva la Alstom
Having shelled out $10.3 billion, GE finally closed on its acquisition of French power company Alstom. In the deal, GE acquired various power assets: gas, steam, onshore and offshore wind, hydropower, and grid solutions. The acquisition has been fruitful so far. During Q4, Alstom contributed $29 billion to GE's backlog, which now stands at a record $315 billion. Additionally, Alstom contributed $2 billion in revenue and $2.6 billion in orders. Though it didn't contribute to GE's earnings per share for Q4 because of costs associated with the deal, GE had stated in December that it expects Alstom to contribute EPS of $0.05 in 2016 and $0.15 to $0.20 EPS in 2018. During the Q4 earnings release, management reiterated the guidance for the coming year.

Between the acquisition of Alstom's wind assets and the creation of Current, GE is aggressively pursuing opportunities in the ever-burgeoning renewable energy industry. During the past quarter, however, GE's renewable energy segment failed to impress. The company reported $1.94 billion in revenue for the segment. This marks a 16% drop year over year; however, it's the equipment revenue -- dropping 19% year over year -- that did the most harm; service revenue mitigated the loss, growing by 37%. Reporting $2.5 billion in orders, GE's equipment bookings dropped 1% year over year while service orders jumped a whopping 40%. Looking toward the future, the company's segment backlog tells a mixed story. Although it reported $12.4 billion in backlog, which marks flat growth year over year, there was a bright side: The core contribution totaled $7.1 billion or 27% growth year over year.

Though the renewable-energy segment delivered lackluster results -- operating profit dropped 79%, totaling $56 million -- there are reasons to remain bullish. In part because of uncertainty regarding the extension of wind industry tax incentives, GE reported lower wind turbine orders -- 827 in Q4, down from 1,251 for the same period last year.

Following the Alstom acquisition, GE expands its global reach. Image source: GE.

There would have been less of a disparity had three deals, totaling 240 turbines and worth more than $550 million in orders, not been delayed until 2016. Management also recognizes that as it transitions to sales of turbines capable of greater energy output, there will be a reduction in the number of units sold. Nonetheless, GE is looking to transition from focusing heavily on product sales. Reinforcing this on the earnings call, management stated, "The most robust part of our business is service." Further supporting the optimism, management cited service backlog growth of 16% in 2015, while it estimates that digital business growth will improve to 20% in the coming year. This digital growth comes, primarily, in the form of the company's Predix platform. Partnering with companies such as AT&T and Cisco, GE offers the digital solution to collect and analyze industrial data in real time, to provide increased efficiency. The Digital Wind Farm, for example, is capable of increasing a wind farm's output by as much as 20%.

Powering the grid
In acquiring Alstom, GE now offers greater grid solutions: GE addresses the distribution side of the business, and Alstom addresses the transmission side. In Q4, GE reported $2.4 in revenue, 20% growth year over year; however, the growth is due to the $1 billion Alstom brought to the table; GE's core revenue of $1.4 billion marked a 28% decrease over the same period. Equipment orders for the segment tell a similar story. Core orders of $1.1. billion represented a 34% decline year over year, but this was mitigated by the $900 million that Alstom provided in equipment orders. Regarding backlog, such as renewable energy, the energy-management segment reported $11.7 billion and flat growth.

Though at first glance it would appear that the energy-management segment suffered a disastrous quarter, it's important to acknowledge the costs associated with the Alstom acquisition and foreign currency exchange. For example, segment operating profit totaled $33 million, a 71% decline from the $113 million it reported in Q4 2014. However, excluding the effects of acquisition and currency exchange, things become brighter -- operating profit of $56 million represents 17% growth over the $48 million from the same period last year.  

The takeaway
About 18 months in the making, GE's acquisition of Alstom is finally complete. The Q4 earnings show the complicated nature of integrating the two companies' operations, but this is temporary. For 2016, the first full year of the acquisition, GE expects synergy benefits to equal $1.1 billion, growing to a $3 billion annualized benefit in 2020 and beyond. As optimistic as this may seem, investors must remember that there's more to GE than just its energy-related segments. For those whose interest is piqued, though, a deeper dive is certainly warranted.