GE Stock Slides As Supply Chain Headwinds Masks Progress

  • General Electric Co GE issued an investor newsletter, mentioning continued supply chain pressure across most of its businesses as material and labor availability and inflation affect Healthcare, Renewable Energy, and Aviation.
  • GE expects these challenges to persist at least through the first half of the year.
  • GE said it had included such pressures in its annual guidance. As announced earlier, GE's outlook calls for organic revenues to grow in the high-single-digit range, adjusted organic profit margin to expand by 150+ basis points, Adjusted EPS of $2.80 - $3.50, and Free cash flow of $5.5 billion - $6.5 billion.
  • However, the magnitude of these challenges likely present pressure to overall growth, profit, and FCF through Q1 and 1H, beyond typically expected seasonality.
  • RelatedGE Q4 Revenue Misses Street View; Expects Revenue Growth In FY22
  • GE said it is focused on mitigating the pressures through pricing and cost actions and with lean mindset. In Aviation, lean is improving first-time yields.
  • GE expects supply chain headwinds may continue to partially mask the significant progress across its businesses.
  • Also ReadAnalysts Cut General Electric Price Target Post Q4 Results
  • Price Action: GE shares are trading lower by 4.68% at $93.85 on the last check Friday.

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