(Reuters) - General Electric Co on Tuesday raised the low end of its full-year profit forecast, helped by strong demand for jet engine spare parts and services on the back of a strong recovery in air travel.
The Boston, Massachusetts-based company now expects 2023 adjusted profit per share of $1.70 to $2.00, compared with its earlier forecast of $1.60 to $2.00.
A speedy recovery in aviation from the depths of the pandemic has lifted results of engine makers as supply chain disruptions have forced airlines to use older jets, boosting demand for aftermarket services.
GE's aviation business, its cash cow, makes engines for Boeing Co's 787 widebody jets. Its joint venture with France's Safran SA, CFM International, powers the U.S. planemaker's 737 MAX jetliners and Airbus' 320neo jets.
On Tuesday, GE said first-quarter revenue from its aerospace business rose 25% to $6.98 billion.
"Given pent-up demand for air travel and the undersupply of aircraft the past few years due to the pandemic, commercial aero (aftermarket and OE) will likely be the fastest-growing industrial end-market for the next few years," Melius Research analyst Robert Spingarn wrote in a note earlier this month.
However, GE has also taken a knock from industry-wide supply shortages and high freight and labor costs, though price hikes and a strong performance at its aviation business have helped alleviate that pain.
GE CEO Larry Culp said in January that he expected inflation to continue to be "challenging" this year.
"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," Culp said on Tuesday.
GE on Tuesday reported an adjusted profit for the quarter through March of 27 cents per share, compared with a loss of 9 cents per share a year earlier.
Analysts on average were expecting a profit of 14 cents per share, according to Refinitiv. It was not immediately clear if the figures were comparable.
GE also posted its first free cash flow in the first quarter since 2015. Shares of the company edged up 1.3% in trading before the bell.
