GE Aerospace (GE) delivered a robust third-quarter performance, significantly surpassing market expectations. The company reported $9.84 billion in revenue, exceeding analysts' consensus estimate of $9.55 billion, driven by strong demand for airplane engines and aerospace components. Net income came in at $1.89 billion, or $1.56 per share, well above the expected $1.28 billion and $1.19 per share.
CEO Larry Culp highlighted the company’s solid execution, noting a 28% increase in orders and a 25% rise in earnings, largely propelled by services. This success allowed GE Aerospace to generate substantial free cash flow, prompting the company to raise its profit guidance for the full year. The revised adjusted earnings per share (EPS) range is now between $4.20 and $4.35, up from the previous forecast of $3.95 to $4.20.
The ongoing Boeing machinists union strike, which was a key concern for analysts ahead of the report, did not appear to significantly impact GE Aerospace’s operations. While a slower production rate for Boeing planes could dampen engine sales, it could boost maintenance services for existing engines. A tentative agreement between Boeing and the union may resolve the strike soon, as union members are set to vote on the terms.
Despite the positive earnings results, GE Aerospace's stock edged down about 1% following the report. However, the stock has seen a strong 40% increase since its April 2024 split from GE Vernova (GEV). Analysts are notably bullish on GE Aerospace, with all eight analysts tracked by Visible Alpha rating the stock a "buy." The average target price for GE Aerospace reflects a potential 9% gain from current levels, compared to more modest projected increases of 3% for GE Vernova and GE HealthCare (GEHC).
This strong quarter reinforces GE Aerospace’s leadership in the aviation industry and positions the company for continued growth through 2024.
CEO Larry Culp highlighted the company’s solid execution, noting a 28% increase in orders and a 25% rise in earnings, largely propelled by services. This success allowed GE Aerospace to generate substantial free cash flow, prompting the company to raise its profit guidance for the full year. The revised adjusted earnings per share (EPS) range is now between $4.20 and $4.35, up from the previous forecast of $3.95 to $4.20.
The ongoing Boeing machinists union strike, which was a key concern for analysts ahead of the report, did not appear to significantly impact GE Aerospace’s operations. While a slower production rate for Boeing planes could dampen engine sales, it could boost maintenance services for existing engines. A tentative agreement between Boeing and the union may resolve the strike soon, as union members are set to vote on the terms.
Despite the positive earnings results, GE Aerospace's stock edged down about 1% following the report. However, the stock has seen a strong 40% increase since its April 2024 split from GE Vernova (GEV). Analysts are notably bullish on GE Aerospace, with all eight analysts tracked by Visible Alpha rating the stock a "buy." The average target price for GE Aerospace reflects a potential 9% gain from current levels, compared to more modest projected increases of 3% for GE Vernova and GE HealthCare (GEHC).
This strong quarter reinforces GE Aerospace’s leadership in the aviation industry and positions the company for continued growth through 2024.