General Electric Co. reported fourth-quarter revenue fell 3%, weighed down by supply-chain difficulties, and projected a return to sales growth this year as its aviation business begins to recover.

The Boston conglomerate reported free cash flow from its industrial operations of $3.8 billion, bringing the full-year total to $5.1 billion, and projected 2022 cash flow of $5.5 billion to $6.5 billion. GEplans to split into three separate public companies over the next two years while it navigates the pandemic’s impact on its...

General Electric Co. reported fourth-quarter revenue fell 3%, weighed down by supply-chain difficulties, and projected a return to sales growth this year as its aviation business begins to recover.

The Boston conglomerate reported free cash flow from its industrial operations of $3.8 billion, bringing the full-year total to $5.1 billion, and projected 2022 cash flow of $5.5 billion to $6.5 billion. GE plans to split into three separate public companies over the next two years while it navigates the pandemic’s impact on its aviation business and supply chain problems.

GE expects that moves the company and its suppliers have made to ease supply-chain problems will benefit the business by midyear, Chief Executive Larry Culp said in an interview Tuesday.

The company has begun using multiple sources in some areas, redesigned products and helped suppliers expand their capacity, he said. Supply-chain problems cut revenue growth by 3 to 4 percentage points in the latest quarter.

GE expects inflation to continue to be a challenge in 2022, with the biggest hit in its onshore wind-turbine business. Mr. Culp said those inflation pressures will fade as supply constraints ease.

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The Omicron variant of Covid-19 hasn’t had a meaningful impact on demand, he said, but it has caused some disruption for suppliers and GE’s own staffing. “Our view is this is going to clear in the relatively near future,” he said.

GE stock traded down $6.10 to $90.81 early Tuesday. The shares remain well below $111.29 reached Nov. 9, the date of the split announcement.

GE expects 2022 adjusted earnings of $2.80 to $3.50 a share, below the $4 a share projected by analysts, according to FactSet. GE said that current analyst estimates aren’t comparable to the outlook it provided because of changes in how it reports.

Overall, GE swung to a net loss attributable to common shareholders of $3.9 billion for the fourth quarter, mostly dragged down by debt repayment costs, compared with a year-earlier profit of $2.4 billion.

Excluding items, GE said its adjusted earnings were 82 cents a share. Including earnings from GE’s legacy insurance business, adjusted earnings were 92 cents a share. Analysts were expecting 85 cents a share on average, according to FactSet.

Revenue fell to $20.3 billion from $21 billion a year ago, missing analyst expectations of $21.31 billion.

After cash flow fell to $600 million in 2020 from pandemic pressure, the company targeted $5 billion for 2021 and at least $7 billion in 2023. It hadn’t yet provided its projections for 2022. GE had industrial cash flow of $9 billion in 2016.

GE said it expects “continued inflation challenges” for 2022 with the biggest hit in its onshore wind-turbine business.

Corporate titans General Electric and Johnson & Johnson both announced that they are splitting, two of the latest in a long string of conglomerate break ups. Here’s why big businesses divide and what it could mean for investors. Photo illustration: Tammy Lian/WSJ The Wall Street Journal Interactive Edition

The separation of the major business will start with the healthcare division early next year. The power and renewables business will combine and form a separate company in early 2024. Existing GE shareholders will get new shares in the two companies after they are spun off.

Since taking over as the first outsider to run GE in 2018, Mr. Culp has sold off businesses, overhauled manufacturing practices and decentralized the management of GE’s divisions, making them responsible for their own investments and costs. In November, GE divested its jet-leasing business for more than $30 billion, allowing it to pay down more debt and fold the remainder of GE Capital, its once-massive financial-services business, into the company’s corporate operation.

GE’s aviation division revenue rose 4% on segment profit of $1.2 billion while orders climbed 22% in the quarter. The results were driven by commercial-service revenue, and GE said the division “continues to evaluate and manage the impact of Omicron.” Last month, GE projected Aviation revenue would return to pre-pandemic levels in 2023.

Revenue in the healthcare division, which makes CT scanners, MRI machines and other hospital equipment, fell 4% because of continuing supply shortages. Profit margins dropped to 16.5% from 19.7% in healthcare during the quarter from shortages and inflation pressure, GE said.

Revenue dropped 13% in the power unit, which makes turbines for power plants, to $4.66 billion, while revenue in the renewable energy unit, which mostly makes wind turbines, fell 6% to $4.19 billion.

GE has cut its gross debt by $87 billion in the past three years, ending 2021 with about $35 billion in debt, $16 billion in cash and $13 billion in shares of AerCap Holdings NV and Baker Hughes Co.

Corrections & Amplifications
GE projected a return to sales growth in 2022. An earlier version of this article incorrectly said 2023. (Corrected on Jan. 25.)

Write to Thomas Gryta at thomas.gryta@wsj.com