GE cuts full-year profit forecast amid troubled renewables business

Oct 25 (Reuters) – General Electric Co ( GE.N ) on Tuesday cut its full-year profit forecast after reporting lower third-quarter profit, mainly due to warranties and related reserves at its renewable energy business Increase.

But the company posted free cash flow of $1.19 billion in the quarter ended September, well above previous estimates. Its quarterly revenue also beat Wall Street’s expectations.

Shares of General Electric were up about 5% in premarket trading.

Sign up now for free and unlimited access to

The Boston-based industrial group said it now expects an adjusted profit of $2.40 to $2.80 per share in 2022, compared with an earlier estimate of $2.80 to $3.50.

The company reported adjusted earnings of 35 cents a share, down from 53 cents a share last year.

Excluding a $500 million warranty and related reserves in its renewable energy business, quarterly profit would have been 75 cents a share.

The company is splitting into three companies, and its onshore wind business faces challenges. The unit, GE’s largest renewable energy business, has struggled with rising raw material costs due to inflation and supply chain pressures.

In the U.S., which has been GE’s most profitable onshore wind market, policy uncertainty following the expiration of the renewable power production tax credit last year hurt customer demand, causing U.S. renewable energy revenue to fall 15% from a year earlier. September quarter.

GE said it expects to lose about $2 billion in renewable energy this year. The company is cutting jobs at its onshore wind division as part of a plan to restructure and resize its more

The company said the restructuring of its renewable energy business is expected to save $500 million a year.

GE reiterated that demand in its aviation division is expected to remain strong, leading to revenue growth of more than 20%. The company said its aviation business has made progress in addressing supply chain issues, with jet engine deliveries recording double-digit growth since the second quarter.

Sign up now for free and unlimited access to

Reporting by Rajesh Kumar Singh and Abhijith Ganapavaram in Bengaluru; Editing by Saumyadeb Chakrabarty, Sriraj Kalluvila and Chizu Nomiyama

Our Standard: The Thomson Reuters Trust Principles.

Source link