- As General Electric Company GE enters 2023, it will split off its healthcare unit, completing a step in the breakup of the industrial giant.
- It will face questions about shedding its power businesses for the rest of the year.
- GE Healthcare Technologies Inc will start trading this week, leaving the conglomerate with jet engines, natural gas-powered turbines, and wind turbine units.
- The gas and wind turbines will be combined with other GE energy businesses into a new unit GE Vernova that will split off in early 2024.
- The once profitable power-generation business produced losses and concerns about its future as the world moves toward greener energy sources.
- The onshore wind-turbine business has struggled with cost inflation and supply-chain problems.
- Scott Strazik, CEO of GE Vernova, has already reversed the cash flow of the power business, which burned through about $2.7 billion in 2018.
- It is now cash-flow positive. He is now restructuring the renewables business, which is expected to post a loss of about $2 billion this year.
- “Within gas power, we’re really on the other side of the journey,” Mr. Strazik said in an interview. For wind, “I see a similar dynamic with gas, where in the first year, you ground yourself. In the second year, you work towards a material improvement,” writes Wall Street Journal.
- Based on his forecasts for 2024 earnings, the analyst estimates that GE Aerospace could have an enterprise value of $94 billion, while GE HealthCare is at around $48 billion, with GE Vernova fetching less than $13 billion.
- Price Action: GE shares are up 0.25% at $84.00 during the premarket session on the last check Tuesday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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