Jan 25 (Reuters) – General Electric Co said on Tuesday it expects profit and free cash flow to rise this year after its quarterly revenue was hit by ongoing global supply chain disruptions .
Supply chain difficulties have increased the group’s lead times and inventory, particularly hampering its healthcare business.
They also fuel inflationary pressure, which has a negative impact on onshore wind activities due to the increase in the cost of transport and raw materials such as steel.
The Boston-based industrial conglomerate also expects inflation to remain a challenge this year.
Businesses of all sizes are grappling with inflationary pressures, as the COVID-19 pandemic has caused bottlenecks in supply chains, driving up costs – from labor to raw materials.
GE is also being hurt by continued uncertainty over the long-term extension of U.S. production tax credits for onshore wind investments.
The title of the company fell 2.4% to 94.6 dollars in trade before the market.
GE, which announced its split into three public companies, plans to return to revenue growth in 2022, thanks to a more than 20% increase in revenue in its aviation business.
The aircraft business, which supplies aircraft engines to Boeing Co and Airbus, is the company’s main source of revenue.
Estimates for 2022 are based on the company’s new financial reporting format, which it adopted after selling its aircraft leasing business and integrating its capital activities into its corporate operations.
GE expects adjusted earnings of between $2.80 and $3.50 (2.48-3.10 euros) per share in 2022, compared to $1.71 per share last year.
Full-year free cash flow is estimated at $5.5 billion to $6.5 billion, compared to $2.6 billion in 2021.
In its new format, the group will no longer present GE Capital, its financial services division, as a stand-alone business segment.
GE’s adjusted earnings, calculated using the old financial reporting format, reached 92 cents per share in the fourth quarter, higher than the 85 cents estimated by Refinitiv analysts.
The group generated $3.8 billion in free cash flow from industrial operations in the quarter, down about $500 million from a year earlier. (1 euro = $1.1275) (Report Kumar Singh; French version Dagmarah Mackos, edited by Sophie Louet)