Why Is GE Aerospace Stock Trading Higher Today?

Post-spin-off GE Aerospace GE reported first-quarter 2024 adjusted revenue growth of 15% year-over-year to $8.1 billion, with orders up 34% YoY to $11 billion.

The company reported increased orders in Commercial Engines & Services and Defense & Propulsion Technologies, with revenue growth driven by pricing, spare parts volume, and higher deliveries in widebody and defense sectors.

Consolidated revenue (including GE Aerospace and GE Vernova Inc. GEV) grew 11% YoY to $16.1 billion and on an adjusted basis, +10% YoY to $15.2 billion. Total orders increased 14% to $20.1 billion.

Adjusted EPS for the consolidated company was $0.82, up from $0.27 a year ago.

GE completed the separation of GE Vernova on April 2 and received proceeds of $2.6 billion from the monetization of a portion of its shares in GE HealthCare Technologies Inc. GEHC.

GE Aerospace’s profit margin expanded 140 bps to 19.1%, and the consolidated adjusted profit margin stood at 10.2%, up 380 bps.

GE repurchased ~1.1 million shares for $0.1 billion in the quarter under a previously authorized $3 billion share repurchase program.

“Given our solid start to the year and outlook for the remainder of 2024, we are raising our full-year profit and free cash flow guidance. Moving forward as a focused global aerospace leader, we will continue to prioritize safety, quality, delivery, and cost — always in that order —while also investing in our future and driving long term profitable growth,” commented GE Aerospace Chairman and CEO H. Lawrence Culp.

Consolidated cash from operating activities was $1 billion for the quarter versus $0.2 billion a year ago. Free cash flow stood at $0.9 billion, up from the prior $0.1 billion a year ago.

GE Aerospace’s free cash flow for the quarter was $1.7 billion versus $0.8 billion in last year’s same quarter.

GE Aerospace 2024 Guidance: GE continues to expect adjusted revenue growth in low double digits; now sees operating profit of $6.2 billion-$6.6 billion (prior $6.0 billion-$6.5 billion).

The company expects adjusted EPS of $3.80-$4.05 (consensus $3.94) and Free Cash Flow to be >$5B, >100% conversion.

Price Action: GE shares are trading higher by 4.4% at $156.80 premarket at the last check Tuesday.