GE Aerospace Raises 2024 Profit Forecast Amid Strong Demand for Jet-Engine Parts and Services

GE Aerospace boosts 2024 profit forecast to $6.2-$6.6B, citing strong demand for jet engine parts and services as airlines keep older planes flying amid new aircraft shortage.

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Aqsa Younas Rana
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GE Aerospace Raises 2024 Profit Forecast Amid Strong Demand for Jet-Engine Parts and Services

GE Aerospace Raises 2024 Profit Forecast Amid Strong Demand for Jet-Engine Parts and Services

GE Aerospace has increased its full-year profit projection for 2024 to $6.2 billion to $6.6 billion, up from its previous forecast of $6 billion to $6.5 billion. The company cites strong demand for jet-engine parts and services as airlines keep their older planes in the air to tide over a shortage of new commercial aircraft.

GE Aerospace's first-quarter adjusted profit, which included results for both aerospace and energy businesses, increased 76% to $1.5 billion, or 82 cents per share. The company reported better-than-expected earnings and revenue for the fiscal Q1 2024, with earnings per share (EPS) of $0.82, beating the consensus estimates of $0.66, and revenue of $16.1 billion, above the estimated $15.24 billion.

For the full year 2024, GE Aerospace has updated its financial guidance, now expecting an adjusted EPS in the range of $3.80 to $4.05, compared to the consensus estimate of $3.94. Additionally, the company anticipates operating profit to be between $6.2 billion and $6.6 billion, an increase from its previous forecast range of $6 billion to $6.5 billion.

Why this matters: The improved outlook reflects the growing demand for air travel and the need for airlines to maintain and service their existing fleets as they struggle to acquire new planes. GE Aerospace's performance is seen as a positive sign for the broader aviation industry, which has been recovering from the impact of the COVID-19 pandemic.

GE Aerospace stands to gain from higher sales of spare parts and services, which are priced at a premium, as airlines are forced to utilize older jets. The company's aerospace business has a crucial balance between original equipment manufacturer (OEM) and aftermarket sales, with its large installed base more than offsetting the losses that come with new engine deliveries. GE Aerospace's shares rose 0.6% in premarket trading following the announcement of its raised profit forecast and strong first-quarter results.

Key Takeaways

  • GE Aerospace raises 2024 profit forecast to $6.2-$6.6B, up from $6-$6.5B.
  • Q1 2024 adjusted profit up 76% to $1.5B, beating estimates on higher revenue.
  • Expects 2024 adjusted EPS of $3.80-$4.05, above consensus estimate of $3.94.
  • Demand for jet engine parts and services rises as airlines maintain older planes.
  • GE Aerospace's shares rise 0.6% after announcing raised profit forecast and Q1 results.