GE raises 2023 profit forecast on aviation boom
General Electric on Tuesday (Oct 24) raised its full-year profit forecast on robust demand for jet engine spare parts and services and improved performance in its renewable business.
Boston, Massachusetts-based GE now expects 2023 adjusted profit per share of US$2.55 to US$2.65, compared with its earlier forecast of US$2.10 to US$2.30.
Free cash flow for the year is estimated to be in a range of US$4.7 billion to US$5.1 billion, up from US$4.1 billion to US$4.6 billion expected in July.
GE’s aviation business, its cash cow, has been lifted by a surge in demand for aftermarket services as a strong rebound in air travel prompted airlines to use jets for longer against the backdrop of a shortage of commercial planes.
“At GE Aerospace, we continue to experience rapid growth driven by robust demand and solid execution, largely in commercial engines and services,” CEO Larry Culp said in a statement.
GE’s aerospace unit, which makes engines for jets made by Boeing and Airbus, posted double-digit growth in orders, revenue and profit from a year earlier. The unit’s margin expanded by 130 basis points in the quarter from a year ago.
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Meanwhile, profits at its grid and onshore wind businesses in the quarter helped narrow losses at its renewable unit. Culp expressed confidence that the businesses would continue to improve.
The renewable business has struggled due to a combination of weak demand, higher raw material and labor costs.
GE, which has completed the separation of its healthcare unit, said it would spin off its energy businesses, including renewables, and aerospace businesses into independent companies in the beginning of the second quarter.
GE said adjusted profit for the quarter through September was US$1.62 billion, compared with a profit of US$359 million a year earlier.
On a per-share basis, adjusted profit was 82 US cents, while adjusted revenue rose 18 per cent to US$16.31 billion. REUTERS
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