GE’s 2023 profit forecast weighed down by renewable business

General Electric forecast a lower-than-expected 2023 adjusted profit on Tuesday, as the industrial major struggles with persistent problems at its money-losing renewable energy business.

Shares in GE were down 2% at $78.29 in premarket trade after the company forecast an operating loss between $200 million and $600 million for its energy business GE Vernova in 2023.

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The company’s renewable energy business has been facing challenges due to inflation and supply chain pressures. The unit reported a loss of $2.2 billion in 2022.

While GE is aiming to make its renewable business profitable next year, Chief Executive Larry Culp has described its onshore wind unit as “the battleground” for the company.

The company is reducing global headcount at the onshore wind unit by about 20% as part of a plan to restructure and resize the business.

GE, which completed the spin-off of its healthcare unit earlier this month, has plans to spin off its energy businesses, including renewables, into a separate company next year.

GE said it expects full-year adjusted earnings in the range of $1.60 to $2.00 per share this year, compared with analysts’ average forecast of $2.36 per share, according to Refinitiv.

Its aerospace business is set to continue to boost results due to strong demand for engines and after market services. GE Aerospace’s operating profit is expected to come in between $5.3 billion and $5.7 billion for 2023.

GE’s adjusted profit for the fourth quarter was $1.24 per share, beating analysts’ average estimate of $1.13 per share.