GE Looks to Higher Profit| MENAFN.COM

Wednesday, 25 May 2022 01:04 GMT

GE Looks to Higher Profit


(MENAFN- Baystreet.ca) GE Looks to Higher Profit

General Electric (NYSE:GE) opened Tuesday's session much lower amid projections for the coming calendar year.

The Wall Street giant forecast higher profit and free cash flow for 2022 on Tuesday after revenue in the quarter through December suffered amid persistent global supply chain disruptions.

The supply chain issues have increased GE's lead times and inventory, hurting its healthcare business.

They are also fueling inflationary pressure, adversely impacting its onshore wind business due to the rising cost of transportation and commodities like steel.

The Boston-based industrial conglomerate expects inflation to remain a challenge this year.
GE is not alone. Companies of all sizes are grappling with inflationary pressures as the COVID-19 pandemic has caused bottlenecks in supply chains, driving up costs for everything from labor to raw materials.

Shares of GE's rival Siemens Energy have been tumbling since the German company's wind power division Siemens Gamesa cut its financial outlook for the third time in nine months on supply chain issues and a surge in costs for vital materials such as steel.

GE's onshore wind business is also taking a hit from lingering uncertainty over whether U.S. production tax credits for onshore wind investments will be extended over the long term.

GE, which has announced it will split into three public companies, expects to return to revenue growth this year on the back of a more than 20% increase in aviation revenue. The aviation business, which makes jet engines for Boeing (NYSE:BA) and Airbus, is the company's cash cow.

GE expects adjusted profit in the range of $2.80 per share to $3.50 per share in 2022, compared with $1.71 per share last year.

Shares dropped $6.77, or 7%, to $90.14.

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