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GE sees risks from war in Ukraine, but retains 2022 earnings forecast

© Reuters. FILE PHOTO: The logo of U.S. conglomerate General Electric is pictured at the site of the company’s energy branch in Belfort, France, February 5, 2019. REUTERS/Vincent Kessler

By Rajesh Kumar Singh

GREENVILLE, S.C. (Reuters) -General Electric Co on Thursday reiterated its 2022 earnings forecast despite inflationary and supply-chain challenges.

Ahead of an in-person investor meeting, the Boston-based industrial conglomerate said it expects to post high-single-digit revenue growth this year on the back of a more than 20% increase in aviation revenue.

Adjusted profit for the year is projected to be in the range of $2.80 per share to $3.50 per share. It also expects to grow its profit margin by 150 basis points and to generate $5.5 billion to $6.5 billion in free cash flow.

The company expects to generate about $10 billion in adjusted operating profit and more than $7 billion in free cash flow in 2023.

“We’re running GE’s businesses better, creating value for shareholders today and tomorrow,” said Chief Executive Larry Culp. “Our stronger balance sheet positions us to deploy capital to invest in growth.”

The investor meeting comes weeks after the company warned that its profits would suffer in the first half of this year due to persistent supply-chain and inflationary pressures.

Almost two years into the coronavirus pandemic that has snarled supply chains across the world and driven up labor and raw material costs, companies of all sizes are scrambling not just to produce enough to meet current demand – but to also restock inventory shelves.

A run-up in global commodity prices following Russia’s invasion of Ukraine has worsened the situation.

Mounting concerns about supply-chain and inflation have also hurt GE’s shares, which are down 11% since mid-January.

The company has said it is raising prices and trying to keep a lid on costs. It is also trying to source alternative parts to help to deal with shortages.

GE, which last November said it would split into three public companies, reaffirmed the timeline for the spin-offs.

It plans to spin off its healthcare business into a separate publicly traded company next year. It would combine its power and renewable energy units, and spin off that operation in 2024. Following the split, it will become an aviation company.

GE reaffirms 2022 earnings forecast despite challenges

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