GE expects difficult business
Fragile supply chains and the explosion in costs, especially for wind turbines, are causing problems for the US conglomerate General Electric (GE). GE is trying to protect its customers from these challenges, but that costs money, said Siemens’ rival on Tuesday in Boston. The losses in wind turbines, but also in conventional gas turbines, could only be partially offset by the booming aircraft business. CEO Larry Culp said GE is on track to hit the low end of its earnings guidance this year. He only has to cut back on the operating cash flow (free cash flow): Around one billion dollars will “shift into the future”, explained GE.
So far, GE had forecast free cash flow of 5.5 to 6.5 billion for 2022. Adjusted earnings per share should reach $2.80 to $3.50. After six months, $1.02 ($0.35) per share was posted, significantly more than analysts had expected. This corresponds to an adjusted profit of 2.61 (1.71) billion dollars. In the second quarter, adjusted earnings almost doubled to $1.66 (0.92) billion, adjusted sales rose two percent to $18.6 billion.
GE is about to be split into three listed companies: GE Healthcare is to be listed first in 2023, and the business with conventional and renewable energies is to be known as GE Vernova in the future. What remains is GE Aerospace.