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GE sticks to 2023 earnings forecast amid renewable energy troubles

By Reuters_News

11:34, 9 March 2023

Miniatures of windmill, solar panel and electric pole are seen in front of General Electric logo in this illustration taken January 17, 2023.
Miniatures of windmill, solar panel and electric pole are seen in front of General Electric logo in this illustration taken January 17, 2023.

Adds more detail, background

By Rajesh Kumar Singh

- General Electric Co GE.N on Thursday reiterated its earnings outlook for this year as booming demand at its aerospace business is expected to make up for challenges at the company's renewable energy business.

Ahead of an investor meeting later in the day, the company said it expected an adjusted earnings of $1.60 to $2.00 a share in 2023, with high-single-digit revenue growth.

A jump in air travel demand has driven up sales at its aerospace division, which makes and services engines for Boeing BA.N and Airbus AIR.PA jets.

GE estimated that the business is set to produce double-digit revenue growth this year, translating into an operating profit of $5.3 billion-$5.7 billion.

But GE Vernova, the company's portfolio of energy businesses, which includes renewables, is expected to report an operating loss of between $200 million and $600 million in 2023, GE said.

GE's renewable energy business has failed to turn a profit in the past eight quarters due to a combination of weak demand, higher raw materials and labor costs and supply-chain pressures.

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This performance has cast a shadow over the company's plan to spin off GE Vernova into a separate company next year.

In a statement, GE Chief Executive Larry Culp on Thursday reiterated the spin-off plan, saying the energy businesses are "preparing to stand on their own sometime in early 2024."

The Boston-based industrial conglomerate said it is "transforming" its renewable energy business and expects profitable growth in the long-run.

 

Reporting by Rajesh Kumar Singh in CINCINNATI, Ohio. Editing by Jane Merriman

 

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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