General Electric deliveries still affected by supply-chain issues
6:37 pm Thursday, September 15th, 2022
By Rajesh Kumar Singh
CHICAGO (Reuters) – General Electric Co is still grappling with supply-chain bottlenecks which have made it tougher to deliver products to customers on time, Chief Financial Officer Carolina Dybeck Happe said on Thursday.
All the businesses of the Boston-based industrial conglomerate have been facing challenges in satisfying customer demand due to shortages of parts, labor and raw materials.
In the second quarter, supply-chain and macroeconomic pressures shaved off 5 percentage points from GE’s revenue.
Dybeck Happe told a Morgan Stanley conference those factors continue to impact output of its jet engines and healthcare products.
“Supply chain continues to be tough and continues to impair our ability to deliver to our customers,” she said.
As a result, she said the company’s cash flow is expected to be under pressure. She expects GE’s free cash flow in the quarter through September to be either in line or slightly better than the June quarter.
The company reported $162 million in free cash flow in the second quarter.
GE’s shares were down 3.9% at $66.2 in extended trading.
To be sure, manufacturers of all shapes and sizes have been struggling to produce enough for current demand and restock inventory after the COVID-19 pandemic fractured global supply chains. The pain, however, is more acute in the aerospace industry.
On Wednesday, Raytheon Technologies warned delivery of some of its Pratt & Whitney large commercial engines may slip into the first quarter.
Dybeck Happe said GE expects a mid-single-digit revenue growth in the third quarter.
(Reporting by Rajesh Kumar Singh; Editing by Chris Reese and Josie Kao)
