GE cuts free cash flow forecast by about $1 billion on supply chain snarls
2022.07.26 14:10
FILE PHOTO: The logo of U.S. conglomerate General Electric is pictured at the site of its energy branch in Belfort, France, February 5, 2019. REUTERS/Vincent Kessler/File Photo
(Reuters) -General Electric Co cut its full-year free cash flow forecast by about $1 billion on Tuesday, as the U.S. industrial conglomerate expects little relief from the global supply-chain disruptions and costs pressures that hit its first-half results.
The Boston-based company’s shares were down 2.3% before the bell.
“Working capital will be pressured as GE protects customers from the impact of supply chain challenges, as well as Renewable Energy-related orders,” the company said.
The pressure will see about $1 billion of free cash flow pushed “into the future”, GE added.
GE had said earlier this year it expects 2022 free cash flow of $5.5 billion to $6.5 billion.
The company, like other U.S. manufacturing majors, has been crimped by raw material shortages and rising freight costs across its operations, though price hikes and cost controls have helped offset some of that pain.
The 130-year-old company was also hit by the COVID-19 lockdowns in China and weakness in its renewable energy business.
