GE is organized into four business segments: Energy, Technology Infrastructure, Capital Finance, and Consumer & Industrial. GE's products and services include aircraft engines, power generation, water processing, security and building technologies, medical imaging, business and consumer financing, media content, and industrial products.
The manufacturer reported strong demand for its jet engines and power equipment in the fourth quarter, resulting in a quarterly profit and higher revenue than a year ago.
The final quarter of the year is typically the strongest for the company, which generated cash flow of $4.3 billion in the period, bringing its total to $4.8 billion for the year. The latest results include GE HealthCare Technologies Inc.
The company had a fourth-quarter profit of $2.1 billion on a 7% increase in total revenue to $21.8 billion. This topped The Wall Street expectations. GE forecast higher revenue for 2023, but set a cash flow target for the year below some expectations after the healthcare spinoff. GE shares slipped 2% in premarket trading.
GE started the year by spinning off its healthcare unit, completing a key step in the breakup of the American conglomerate. GE is now focused on GE Aerospace, its jet engine division, and a portfolio of energy businesses that will become a separate company called GE Vernova in 2024.
GE's projected free cash flow for 2023 is between $3.4 billion and $4.2 billion, an estimate that may be revised over the course of the year. In mid-2022, GE lowered its projections by approximately $1 billion from the $5.5 billion to $6.5 billion range it had initially forecast.
The company expects to see an operating profit of $5.3 billion to $5.7 billion for GE Aerospace for the year, and an operating loss of $600 million to $200 million for GE Vernova.
"Looking ahead, GE is positioned to drive growth, profit, and cash, and our outlook reflects our confidence in our businesses,” GE Chief Executive Larry Culp said in a statement. This confidence is based on our strong portfolio of businesses, our disciplined approach to execution, and the continued commitment of our team to deliver results for our shareholders.
The spinoffs are designed to simplify GE's operations and make the assets more attractive to investors. Mr. Culp has said that the breakup will bring more focus and accountability to the business he has revamped since 2018. He plans to stay on as CEO of GE Aerospace, the biggest and most profitable unit.
Fourth-quarter revenue in the aerospace business jumped 25%, while orders rose 26%. The growth was driven by commercial services revenue on higher repair shop visits and spare part sales, fueled by a jump in air travel after pandemic restrictions were lifted.
Revenue in the renewables business, which makes wind power turbines, fell 19% from a year ago. In the rest of the power business, revenue increased 8% and orders increased 26%. The renewables segment, which has been cutting costs in a turnaround effort, is expected to become profitable in 2024.
Revenue in the healthcare business rose 7% in the period, while orders were flat. The newly separate company will report fourth-quarter results next week.
In its fourth quarter, GE reported net income of $2.1 billion attributable to common shareholders, compared to a loss of $3.9 billion in the same quarter a year ago. Excluding items, GE's adjusted earnings were $1.24 per share, above Wall Street's estimate of $1.15 per share. This is an improvement from the 82 cents per share reported in the year-earlier quarter.
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