General Electric (GE) on Tuesday posted stronger-than-expected first-quarter earnings, while boosting its full-year forecasts for free cash flow and profits thanks in part to the strength of its core aerospace division.
General Electric said adjusted non-GAAP earnings for the three months ended in March were pegged at 27 cents per share, up 12.5% from a year earlier and nearly double the Wall Street consensus forecast of 14 cents. Group revenues, General Electric said, fell 15% from a year earlier to $14.5 billion, but again topped analysts' estimates of an $13.36 billion tally.
Looking into the current financial year, GE said it saw adjusted earnings in the region of $1.70 to $2, compared with its prior forecast of $1.60 to $1.80 a share. And it reiterated its estimate for organic-sales growth in the mid-to-high-teens percent.
In terms of free cash flow, GE also lifted the lower end of its prior guidance to a new range of between $3.6 billion and $4.2 billion, after posting its first positive free cash flow first quarter since 2015.
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'Encouraging Start in 2023': GE CEO Culp
"The GE team is off to an encouraging start in 2023, with our results reflecting robust market demand and our progress operating leaner and more focused businesses," Chief Executive Larry Culp said in a statement.
"In the first quarter, we delivered double-digit top-line growth with all segments up organically and continued strength in services, as well as margin expansion in all segments. And we reported our first positive free cash flow in the first quarter in nearly a decade."
"At GE Aerospace, we are growing rapidly and supporting our customers amidst the pronounced commercial ramp," Culp added. "At GE Vernova, we are seeing continued signs of progress in Renewable Energy while Power is delivering solid growth.
"Overall, GE is creating significant value today and tomorrow as we prepare to stand up these leading franchises as independent companies sometime in early 2024."
General Electric shares, which closed over the $100 mark for the first time since 2018 last night, were marked 2.45% lower in early afternoon trading Tuesday to change hands at $97.70 each, a move that would extend the stock's year-4to-date advance to around 53%.
GE Aerospace Division Results
GE Aerospace saw revenue rise 25% from a year earlier to $6.98 billion, thanks in part to renewed demand from one of its key customers, planemaker Boeing (BA), while the unit's profit grew 46% to $1.33 billion.
GE, which spun off its health-care division, GE Healthcare Technologies, earlier this year, is also planning to separate its energy business, which will be called GE Vernova, through a tax-free deal sometime in 2024.
Vernova revenue was down 1% from a year earlier at $2.84 billion, while the unit's loss narrowed by 5% to $414 million.
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