General Electric (GE -0.60%) issued new guidance Thursday, warning that it projects the impacts of the global coronavirus outbreak will reduce its free cash flow by $300 million to $500 million in the first quarter.

GE management characterized the outbreak as an "evolving variable," and projected that COVID-19 would similarly take an approximately $200 million to $300 million bite out of its Q1 operating profits. The company now projects adjusted earnings of approximately $0.10 per share for the quarter, and approximately negative $2 billion in free cash flow for its GE Industrial unit.

A cartoon depicts people wearing masks in response to coronavirus threat.

Image source: Getty Images.

2020 projections reaffirmed

The former blue chip reaffirmed its prior full-year adjusted earnings guidance range of $0.50 per share to $0.60 per share, and its free cash flow guidance for GE Industrial  of $2 billion to $4 billion. It continues to expect the adjusted profit margin for its GE Industrial unit to expand organically by 0 to 75 basis points.

"Compared to 2019, GE's 2020 outlook assumes lower free cash flow and profit from BioPharma due to its planned disposition in the first quarter, subject to regulatory approval, as well as reduced cash from Baker Hughes shareholder dividends," the company said. "GE expects to offset these effects through performance improvements and reduced non-operational headwinds. GE's 2020 outlook also assumes the 737 MAX returns to service in mid-2020, in line with Boeing (BA -1.02%)."

Should investors be concerned?

GE remains in the midst of a financial turnaround, continues to face the headwinds created by Boeing's troubles, and has not convinced investors of its ability to continue to increase free cash flow on an ongoing basis. Investors might be wise to wait for more information on these factors, as well as on how the COVID-19 outbreak impacts the company in the medium term, before deciding about whether to add GE to their portfolios.