GE stock slides as CFO warns of supply chain problems

GE stock slides as CFO warns of supply chain problems

Updated at 10:08AM EST

General Electric (GE) Stocks fell on Friday after the industry group warned that ongoing disruptions in the supply chain could reduce its closely-tracked cash flow forecast.

GE Chief Financial Officer Carolina Dybeck Happe said supply chain disruptions extended into the back half of the year, affecting everything from labor to parts and materials, making it difficult to get products to customers. Dibek Happy said some orders are now being pushed into the fourth quarter, putting pressure on cash flows for the current quarter.

Speaking at the Morgan Stanley Laguna conference on Thursday, Dybeck Happe nonetheless said third-quarter cash flow is likely to be consistent, or slightly better, than second-quarter earnings of $162 million, adding that the group expects strong organic growth in each of its areas. Air and health care. Divisions over the last three months of the year.

GE shares were down 4.5% in early trading Friday to trade at $65.81 per share, extending the stock’s six-month decline to more than 30.5%.

Earlier this summer, GE confirmed its forecast for 2022, which it first published in January, saying it expects adjusted earnings at the lower end of $2.80 to $3.50 per share.

The group also trimmed about $1 billion from its free cash flow forecast, bringing the unofficial number to between $4.5 billion to $5.5 billion.

The industry group is also pressing ahead with its historic $2.5 billion plans to split it into three separate companies, focused on aviation, healthcare and energy.

GE Vernova will be the name of the Energy and Renewable Energy division, which will also include energy financial services. The division will be operated by Scott Strazik and likely to be rolled out to the public markets through a tax-free deal in 2024.

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GE Healthcare will be the official name for the third business unit, with plans to list the Nasdaq Global Select Market under the ticker symbol GEHC in early 2023.

GE’s modular aviation unit, which the company said CEO Larry Kolb will manage, will be called GE Aerospace.

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