Key Highlights:
- General Electronics Co is expecting to have strong revenue growth.
- The company did experience a fall of 1.4% in shares in the morning trading.
- The persistent supply chain has affected the revenue stream of GE.
GE Co is expecting strong revenue growth this year. Although the company did face inflationary and supply-chain challenges, the company is still optimistic about the growth.
The Chief Executive of GE, Larry Culp, has confirmed this with his statement. This official statement came after the industrial conglomerate warned that there will be supply and labor shortages alongside inflation, which would pressure the profits of the companies through the first half of the year.
GE experiences supply chain issues
Larry Culp stated that while GE was adjusting the prices, it would not be able to fully offset higher costs with increased prices. At the Citi Industrial conference, he said, “This is a tough operating environment.”
General Electric Co has experienced a fall of shares by 1.4% at $92.78 in the morning trading.
The company experienced grappling supply chain issues across most of the businesses in the last week. Moreover, there were also labor and raw material shortages alongside soaring costs that adversely affected the healthcare, aviation, and renewable energy units.
These supply chain issues have led to the decline in GE’s revenue quarter through December. The company was struggling with catering to the demands in the healthcare business.
Optimistic for growth
Larry Culp is optimistic that the team will work hard in the coming months to make up for the loss. He commented, “We clearly have another six months here, at least, where we have to fight tooth and nail to get products to customers.”
In order to mitigate the impact, GE is exploring new suppliers, sourcing alternative parts, and also redesigning product configurations. However, Culp is expecting a shortage in supplies for a while. But the price hikes and moves to improve supplies can start showing results in the second half of the year.
GE is forecasting revenue growth this year with a profit margin of 150 basis points. It expects to generate $5.5 billion to $6.5 billion in free cash flow. Larry Culp has backed these estimates.
