20.3 C
London
Wednesday, May 15, 2024
HomeLarge Cap StocksGeneral Electric Co (NYSE: GE) Ups Full-Year Profit Outlook, Led By Strong...

General Electric Co (NYSE: GE) Ups Full-Year Profit Outlook, Led By Strong Jet Engine Demand

Date:

General Electric Co (NYSE: GE) moves up 2.45% to $102.60 on Tuesday as the company upped the low end of its full-year profit prediction, aided by robust demand for jet engine spare parts and services as air traffic recovers.

In January, GE CEO Larry Culp predicted that inflation would remain “challenging” this year. “The GE team is off to an encouraging start in 2023, with our results reflecting robust market demand as well as our progress operating leaner and more focused businesses,” Culp remarked on Tuesday. The Boston-based business now anticipates an adjusted profit per share of $1.70 to $2.00 in 2023, up from $1.60 to $2.00 before.

A quick rebound in aviation from the depths of the epidemic has boosted engine makers’ performance, since supply chain interruptions have pushed airlines to employ older planes, increasing demand for aftermarket services.

GE’s cash cow, the aviation sector, produces engines for Boeing Co’s 787 widebody planes. CFM International, a joint venture with France’s Safran SA, powers Boeing’s 737 MAX jetliners and Airbus’ 320neo planes.

GE announced on Tuesday that sales from its aerospace division increased by 25% to $6.98 billion in the first quarter.”Given pent-up demand for air travel and the undersupply of aircraft over the past few years due to the pandemic, commercial aero (aftermarket and OE) will likely be the fastest-growing industrial end-market for the next few years,” Melius Research analyst Robert Spingarn wrote in a note earlier this month.

GE, on the other hand, has suffered from industry-wide supply shortages as well as high freight and labor costs, though price increases and solid performance in its aviation division have helped to lessen that pain.

GE reported an adjusted profit of 27 cents per share for the quarter ended March 31, compared to a loss of 9 cents per share the previous year.

According to Refinitiv, analysts expected a profit of 14 cents per share on average. It was unclear whether the statistics were comparable. GE also reported its first quarterly free cash flow since 2015.

Today's Top Stocks - Free List!

Latest stories