GE sees USD 2bn in full-year losses at Renewables, plans restructuring

US conglomerate General Electric Co (NYSE:GE) today announced plans to restructure its renewable energy division which is now seen to bring about USD 2 billion (EUR 2.03bn) in losses for the full year.

As unveiled a year ago, GE plans to separate itself into three independent public companies focused on aviation, healthcare and energy. GE Vernova will be formed to bundle the group’s energy businesses, including its renewable energy activities known for the production and supply of onshore and offshore wind turbines.

On Tuesday, GE said it intends to launch a restructuring programme across the GE Vernova-labeled operations, primarily at the current Renewable Energy segment, in order to achieve some USD 500 million in annualised savings. The planned actions are seen to improve quality and reduce costs, the company said.

"Within GE Vernova, Power remains on track to grow this year and we are taking significant actions to reset Renewable Energy. External catalysts, like recent US legislation and the energy crisis in Europe, are increasing investment in new decarbonisation technologies, helping position GE Vernova for longer-term growth," commented H. Lawrence Culp, Jr., GE chairman and CEO and GE Aerospace CEO.

In the third quarter of 2022, orders at the renewable energy segment dropped by 43% on a reported basis and 41% organically to USD 3.7 billion compared to a year earlier, the reason being “a difficult prior year comparison in Offshore Wind.” Revenues amounted to USD 3.6 billion, going down 15% on a reported basis and 10% organically because of lower US volume in Onshore Wind driven by the PTC lapse and heightened new business selectivity. The decline was only partially offset by pricing improvement and services growth of 40% organically. More details are available in the table below.

GE pointed out that higher than anticipated warranty pressure, inflation and lower demand are expected to result in 2022 losses at Renewable Energy of about USD 2 billion. This, in turn, is affecting groupwide projections for full-year profits and GE now forecasts an adjusted earnings per share (EPS) range of USD 2.40-2.80 rather than USD 2.80-3.50 as projected at the start of the year.

Despite all this, the planned spin-offs remain on track and GE HealthCare is scheduled to be separated in the first week of January, Culp stated.

(USD 1 = EUR 1.015)

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