GE stock leapt Tuesday after jet maker GE Aerospace topped Q1 forecasts, which also included results for GE Vernova prior to the spinoff.
GE Aerospace reported standalone adjusted earnings of 92 cents for the quarter. Solo adjusted revenue rose 15% to $8.1 billion.
Consolidated adjusted earnings for both GE Aerospace and GE Vernova were 82 cents per share for the quarter, with consolidated GAAP earnings coming out to $1.38 per share. Total consolidated revenue increased 11% to $16.1 billion.
FactSet analysts expected adjusted earnings of 65 cents per share on $15.25 billion in revenue.
Prior to the split, GE last year reported Q1 adjusted earnings of 22 cents per share on $13.69 billion in sales.
GE Aerospace reported a 34% increase in total orders to $11 billion, primarily driven by orders for commercial engines and services. Free cash flow was $1.7 billion for the quarter.
Outlook
For fiscal 2024, GE Aerospace expects adjusted earnings to range from $3.80 to $4.05 per share with free cash flow exceeding $5 billion. GE raised its total operating profit outlook to range from $6.2 billion to $6.6 billion, from the prior guidance of $6 billion to $6.5 billion.
The company expects commercial engines and services revenue to grow in the mid-to-high teens. GE lifted its operating profit outlook for the business segment by $0.1 billion to range from $6.1 billion to $6.4 billion.
Defense and propulsion technologies revenue is seen rising in the mid- to high-single-digits. GE expects its defense operating profit between $1 billion and $1.3 billion.
In early March, GE Aerospace pared its 2025 revenue outlook to low double-digit growth, which is the lower end of its prior range of up to double-digit sales growth in the high teens. The company forecasts an operating profit of about $7.3 billion as the midpoint for the year.
GE Aerospace aims to reach an operating profit of $10 billion in 2028.
In terms of capital allocation, the company plans to deliver roughly 70%-75% of cash to shareholders through dividends and share buybacks. That includes an initial dividend payout at 30% of net income, subject to board approval, and $15 billion in share buybacks.
TD Cowen on April 9 upgraded GE stock to buy from hold. Cowen noted it's bullish on GE Aerospace's commercial aftermarket prospects in light of Boeing production issues. Over 50% of GE Aerospace sales and 75% of its profits come from the commercial aerospace aftermarket following the spinoff, TD Cowen says. The report added that it should see a near-term boost from the Boeing 737 Max production challenges. The firm raised its price target on GE shares to $180 from $175.
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GE Stock
GE stock rallied 8.3% Tuesday to rebound above its 10-day line. Shares rose 1.4% Monday, bouncing off their 21-day exponential moving average.
GE stock jumped 37% in 2024 leading up to the April 2 spinout.
GE Aerospace stock nearly 60% so far this year and is trading at its highest level since April 2008.
Elsewhere, GE Vernova announces Q1 results early Thursday, the energy firm's first report as an independent firm. And GE HealthCare, spun off in late 2022, reports on April 30.
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