GE Aerospace's stock surges toward a 16-year high after earnings beat

MW GE Aerospace's stock surges toward a 16-year high after earnings beat

By Tomi Kilgore

GE Aerospace standalone Q1 revenue rose 15%, while revenue including GE Vernova increased 11%

Shares of GE Aerospace got a boost premarket Tuesday as quarterly profit and revenue - including results before the spinoff of GE Vernova was completed - rose above expectations.

On a standalone basis, the maker of jet engines used on commercial and military aircraft said it has seen a "solid" start to the year, with revenue growth outpacing that of the combined companies.

GE Aerospace's stock $(GE)$ climbed 5% in premarket trading, putting it on track to open around the highest closing price seen since May 2008. GE Vernova shares $(GEV)$ tacked on 0.9%. The spinoff took effect on April 2.

On a combined basis, first-quarter net income dropped to $1.54 billion, or $1.39 a share, from $7.36 billion, or $6.71 a share, in the same period a year ago.

Excluding nonrecurring items, such as gains on sold ownership interest, adjusted earnings per share rose to 82 cents from 27 cents to beat the FactSet consensus of 65 cents.

Revenue grew 10.8% to $16.05 billion, above the FactSet consensus of $15.25 billion.

On a standalone basis, GE Aerospace revenue rose 15% to $8.1 billion, as orders jumped 34% to $11 billion. Free cash flow of $1.7 billion was up from $800 million last year.

Looking ahead, GE Aerospace raised its 2024 guidance range for operating profit to $6.2 billion to $6.8 billion from $6.0 billion to $6.5 billion. Adjusted EPS is expected to be $3.80 to $4.05, compared with the current FactSet consensus of $4.25.

The company maintained its outlook for revenue of more than low-double-digit percentage growth and free cash flow of greater than $5 billion.

GE's stock has soared 47.6% year to date through Monday, while the Industrial Select Sector SPDR ETF $(XLI)$ has advanced 6.5% and the S&P 500 has tacked on 5.1%.

-Tomi Kilgore

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April 23, 2024 07:54 ET (11:54 GMT)

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