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General Electric Co GE-N on Tuesday reported better-than-expected quarterly earnings on robust demand for its jet engines and power equipment, but offered a disappointing profit forecast for this year as it struggles with persistent problems at its renewable energy business.

The company’s shares were down about 1 per cent at $78.98 in premarket trade.

GE expects full-year adjusted earnings in the range of $1.60 to $2.00 per share this year, up from a profit of 77 cents a share in 2022. The forecast compares with analysts’ average forecast of $2.36 per share, according to Refinitiv.

The Boston-based company also expects to generate higher free cash flow this year as its aviation business is tipped to benefit from strong demand for engines and after-market services.

It, however, forecast an operating loss between $200-million and $600-million for its energy business GE Vernova in 2023.

The company’s renewable energy business has been facing challenges due to inflation and supply chain pressures. The unit reported a loss of $2.2-billion in 2022.

It is reducing global headcount at the onshore wind unit by about 20 per cent as part of a plan to restructure and resize the business.

In an interview, Chief Executive Larry Culp said the onshore business is expected to get a boost following the restoration of the tax credit for wind projects.

“We think we’re going to see a step up not only in 2023, but in (20)24 and beyond,” Culp told Reuters.

Culp said high inflation is also posing a challenge for offshore wind business as it is making customers review economics of their projects.

GE, which completed the spin-off of its healthcare unit earlier this month, has plans to spin off its energy businesses, including renewables, into a separate company next year.

Culp said the company is still wrestling with inflationary and supply-chain pressures. He expects inflation to be a “test” for the company even as it adjusts its prices to offset higher costs.

While there has been no material improvement in supply-chain problems, Culp said the company has become better at getting around them. For example, GE has deployed hundreds of its employees at sites of its aerospace suppliers to ease some of the bottlenecks.

GE’s adjusted profit for the fourth quarter came in at $1.24 per share, beating analysts’ average estimate of $1.13 per share.