General Electric decided to cut its annual earnings forecast after reporting on Tuesday a 19% drop in adjusted quarterly profit. The company cites supply bottlenecks, inflation, and a decline in its renewable energy business as the main reasons for this decline.
The U.S. manufacturing giant shifted its full-year adjusted profit from $2.40 to $2.80 per share. Previously, expectations sat at $2.80 to $3.50 per share. Additionally, the company revealed that its adjusted profit for the quarter ending September fell to $1.06 billion.
Chief Financial Officer Carolina Dybeck Happe explained last month that as a result of General Electric’s supply chain issues, the company has struggled to deliver products to customers on time. In terms of its weakened renewable energy business, the expiry of renewable electricity production tax credits last year has created uncertainty around policy, thereby damaging customer confidence. This decline in business led General Electric to lay off workers at its renewable business’ onshore wind unit.
General Electric is not alone in facing its supply bottleneck, with supply shortages affecting U.S. manufacturing companies across the board. The company’s shares fell by 7.3% on Tuesday morning before the bell.