General Electric deliveries still affected by supply chain issues

A woman stands in front of a General Electric (GE) sign during the Global Conference on Artificial Intelligence, following the coronavirus disease (COVID-19) outbreak, in Shanghai, China September 1, 2022. REUTERS /Aly Song

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CHICAGO, Sept 15 (Reuters) – General Electric Co (GE.N) is still grappling with supply chain bottlenecks that have made it more difficult to deliver products to customers on time, the company said on Thursday. CFO Carolina Dybeck Happe.

All businesses in the Boston-based industrial conglomerate have faced challenges meeting customer demand due to shortages of parts, labor and raw materials.

In the second quarter, supply chain and macroeconomic pressures reduced GE’s revenue by 5 percentage points.

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Dybeck Happe told a Morgan Stanley conference that these factors continue to impact the production of its jet engines and healthcare products.

“The supply chain continues to be difficult and continues to impact 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 in line or slightly better than the June quarter.

The company reported $162 million in free cash flow in the second quarter.

Shares of GE fell 3.9% to $66.2 in extended trading.

To be sure, manufacturers of all shapes and sizes are struggling to produce enough to meet current demand and replenish inventory after the COVID-19 pandemic fractured global supply chains. The pain, however, is more acute in the aerospace industry.

On Wednesday, Raytheon Technologies (RTX.N) warned that delivery of some of its Pratt & Whitney large commercial engines could slip in the first quarter. Read more

Dybeck Happe said GE expects mid-single-digit revenue growth in the third quarter.

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Reporting by Rajesh Kumar Singh Editing by Chris Reese and Josie Kao

Our standards: The Thomson Reuters Trust Principles.

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