GE Stock (NYSE:GE)
Thursday’s meeting of General Electric (NYSE:GE) stockholders will likely center on the company’s loss-making renewable energy sector and ongoing supply-chain difficulties at its aircraft arm.
The Boston-based industrial conglomerate’s shares have increased by nearly 80% since the end of September because of investor confidence brought on by the company’s $100 billion debt reduction. Other factors contributing to this rise in confidence include the spinoff of its healthcare business and strong demand in the aerospace business.
Yet there is still a challenge with renewable energy.
Due to low demand, rising raw materials and labor prices, and supply-chain constraints, the GE Vernova energy division has not been profitable for the previous eight quarters. According to filings, it lost $2.2 billion in the previous fiscal year.
Analysts have questioned whether or not GE can proceed with its plan to spin off GE Vernova into a new company without making changes, such as delaying the spinoff or altering the assets that would be spun off.
Larry Culp, CEO of GE, has said the renewables division needs “wiring and plumbing” before it can be spun off.
“I want to understand if there is any potential at all that Vernova would not incorporate GE wind,” William Blair analyst Nicholas Heymann said.
To focus on the onshore wind business turnaround, GE has decreased the worldwide workforce of the unit by around 20%. This reorganization and downsizing are projected to provide savings this year.
Even though demand has increased in North America thanks to tax incentives for wind projects provided by the US Inflation Reduction Act (IRA), the firm does not anticipate a significant improvement in the onshore market in the first half of 2023.
Moreover, GE is having trouble in the offshore wind industry because a US jury recently ruled that GE’s Haliade-X wind turbines infringed on a patent held by Siemens Gamesa Renewable Energy (OTC:GCTAY).
An analyst at Bernstein, Brendan Luecke, predicts a loss for GE’s renewables division in 2018.
On Thursday, GE is anticipated to restate its adjusted profits guidance for 2023, which is between $1.60 and $2.00 per share.
The aircraft industry needs more workers, resources, and components to produce engines for Airbus and Boeing (NYSE:BA).
Unfulfilled client orders totaled $135 billion at the end of 2022, an increase of 8% from the previous year, making this division GE’s cash cow.
While GE has sent hundreds of workers to its aerospace suppliers’ facilities to alleviate the backlog, the situation has yet to improve noticeably.
Although GE stock has made significant strides, the company still faces specific threats, according to analysts at JPMorgan (NYSE:JPM).
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Author Shariq Khan 
