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Tuesday, October 25, 2022 8:59:02 AM
GE cuts full-year earnings forecast on troubles at renewable energy business
By: Investing.com | October 25, 2022
(Reuters) -General Electric Co on Tuesday trimmed its full-year profit forecast after reporting a decline in third-quarter earnings, primarily due to higher warranty and related reserves at its renewable energy business.
But the company's free cash flow in the quarter through September came in at $1.19 billion, much higher than its previous estimate. Its quarterly revenue also topped Wall Street's estimates.
GE's shares were up about 5% in pre-market trade.
The Boston-based industrial conglomerate said it now expects adjusted profit in 2022 in the range of $2.40 to $2.80 per share, compared with $2.80 to $3.50 estimated earlier.
The company reported an adjusted profit of 35 cents a share, lower than a profit of 53 cents a share last year.
Excluding a $500 million warranty and related reserves at its renewable energy business, quarterly profit would have been 75 cents a share.
The company, which is in the process of breaking up into three companies, is facing challenges at its onshore wind business. The unit, which is the largest of GE's renewable businesses, has been battling higher raw material costs due to inflation and supply-chain pressures.
In the United States, which has been GE's most profitable onshore wind market, policy uncertainty following the expiry of renewable electricity production tax credits last year has hurt customer demand, contributing to a 15% year-on-year drop in renewable energy revenue in the September quarter.
GE said it expects renewable energy losses of about $2 billion this year. It is laying off workers at its onshore wind unit as part of a plan to restructure and resize the business.
The restructuring at its renewable energy business is expected to deliver $500 million in annualized savings, the company said.
GE reiterated that demand at its aviation unit is expected to remain strong, resulting in more than 20% revenue growth. The company said its aviation business has made progress in addressing supply chain problems, leading to double-digits increase in jet engine deliveries since the second quarter.
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By: Investing.com | October 25, 2022
(Reuters) -General Electric Co on Tuesday trimmed its full-year profit forecast after reporting a decline in third-quarter earnings, primarily due to higher warranty and related reserves at its renewable energy business.
But the company's free cash flow in the quarter through September came in at $1.19 billion, much higher than its previous estimate. Its quarterly revenue also topped Wall Street's estimates.
GE's shares were up about 5% in pre-market trade.
The Boston-based industrial conglomerate said it now expects adjusted profit in 2022 in the range of $2.40 to $2.80 per share, compared with $2.80 to $3.50 estimated earlier.
The company reported an adjusted profit of 35 cents a share, lower than a profit of 53 cents a share last year.
Excluding a $500 million warranty and related reserves at its renewable energy business, quarterly profit would have been 75 cents a share.
The company, which is in the process of breaking up into three companies, is facing challenges at its onshore wind business. The unit, which is the largest of GE's renewable businesses, has been battling higher raw material costs due to inflation and supply-chain pressures.
In the United States, which has been GE's most profitable onshore wind market, policy uncertainty following the expiry of renewable electricity production tax credits last year has hurt customer demand, contributing to a 15% year-on-year drop in renewable energy revenue in the September quarter.
GE said it expects renewable energy losses of about $2 billion this year. It is laying off workers at its onshore wind unit as part of a plan to restructure and resize the business.
The restructuring at its renewable energy business is expected to deliver $500 million in annualized savings, the company said.
GE reiterated that demand at its aviation unit is expected to remain strong, resulting in more than 20% revenue growth. The company said its aviation business has made progress in addressing supply chain problems, leading to double-digits increase in jet engine deliveries since the second quarter.
Read Full Story »»»
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