Why General Electric Shares Are Soaring Today

General Electric Co GE reported second-quarter FY23 revenues of $16.70 billion, an increase of 18% year-over-year, beating the consensus of $15 billion.

Adjusted revenue grew 19% YoY to $15.9 billion. Total orders increased by 59% Y/Y to $22 billion and up 58% on an organic basis.

Adjusted EPS was $0.68, up from $0.36 a year ago, beating the consensus of $0.46.

GE reported a profit margin GAAP of 8.3%, up by 1,510 bps, and an Adjusted organic operating margin of 9.3%, up 160 bps organically.

Aerospace's Q2 revenues jumped 28% Y/Y to $7.86 billion, driven by strength in both Commercial Services and Defense, while orders rose 37% to $9.45 billion.

GE Vernova Renewable Energy revenues increased by 24% Y/Y to $3.85 billion; Orders were $8.3 billion for the quarter compared to $3.11 billion a year ago.

GE Vernova Power Orders were increased by 7% Y/Y to $4.35 billion. Revenues declined by 2% Y/Y organically to $4.15 billion, driven by continued services growth, and higher HA deliveries were primarily offset by lower aeroderivative shipments.

Cash from Operating Activities (CFOA) for six months ended June 30, 2023, totaled $465 million, compared to negative $(434) million a year ago. Free cash flow was $517 million.

GE repurchased ~3 million shares for $0.3 billion during the quarter, with $1.4 billion remaining under the authorization.

"GE Aerospace is growing rapidly, executing on the ramp for customers and building services strength, while GE Vernova advances toward its spin-off as Renewable Energy improves and Power continues to deliver. Each business has its own critical mission and focus. We're increasingly operating as GE Aerospace and GE Vernova as we prepare to launch these two independent companies sometime in early 2024," commented GE Chairman and CEO and GE Aerospace CEO H. Lawrence Culp, Jr.

GE raised its FY23 guidance based on first-half performance and continued second-half strength.

FY23 Guidance: GE now expects Organic revenue growth in the low double-digit range, up from the prior high-single-digit range.

GE sees Adjusted EPS of $2.10-$2.30 (up from $1.70-$2.00) versus the consensus of $2.06. GE sees Free cash flow of $4.1 billion-$4.6 billion, up from $3.6 billion-$4.2 billion.

Price Action: GE shares are trading higher by 5.5% at $116.35 on the last check Tuesday.