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GE Stands by Forecast for Now Despite $500 Million Virus Drag

  • First-quarter cash flow, profit crimped by reduced capacity
  • Outbreak’s impact for the full year is too early to assess
An American flag hangs as General Electric Co. (GE) Evolution Series Tier 4 diesel locomotives stand on the final assembly line at the GE Manufacturing Solutions facility in Fort Worth, Texas.

An American flag hangs as General Electric Co. (GE) Evolution Series Tier 4 diesel locomotives stand on the final assembly line at the GE Manufacturing Solutions facility in Fort Worth, Texas.

Photographer: Luke Sharrett/Bloomberg
Updated on

General Electric Co. stood by its annual financial forecast despite a first-quarter blow from the coronavirus outbreak that has disrupted supply chains and hurt business activity worldwide. There’s still a danger that the outlook will worsen.

Free cash flow from manufacturing operations will take a hit of as much as $500 million this quarter because of the virus’s spread, GE said Wednesday. The infection will drag down operating profit by as much as $300 million, in part as canceled flights in China weigh on the aviation business. The 2020 forecast doesn’t incorporate the virus’s impact beyond the first quarter, with GE saying it’s “too early” to assess the longer-term effects.