GE Tumbles as Company Flags Supply Woes at Health Care Unit
(Bloomberg) -- General Electric Co. shares fell after the company warned that difficulties at its health care division -- the company’s top source of profits -- would be a drag on the unit’s revenue and margin growth.
The Boston-based industrial giant said its medical-scanner division is experiencing “sustained pressure” from shortages of labor and materials such as semiconductors and resins. It expects this to continue through the end of the year, Steve Winoker, GE’s vice president of investor relations wrote in a shareholder update on the company’s website.
The shares erased earlier gains, tumbling as much as 2.8% on Wednesday. The stock declined 1.8% to $101.43 at 11:57 a.m. in New York.
GE Healthcare, which manufactures medical imaging machines used by hospitals among other products, has been a steady source of profits and cash flow as Chief Executive Officer Larry Culp pushes to turn around the Boston-based industrial giant after the pandemic gutted its crown jewel jet engine business.
Winoker said GE expects a “challenging environment” throughout the first half of 2022, although the company reaffirmed its 2021 guidance for the division.
Businesses across the U.S. are grappling with higher commodities and transportation costs and a lack of workers. PPG Industries Inc. on Tuesday pulled its 2021 financial guidance, citing mounting pressure from commodity supplies and other challenges that are dragging down sales.
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