GE Aerospace set to report its second report since split; Will Boeing and Airbus woes rattle investor confidence?
1min read GE Aerospace is set to report its second-quarter earnings before the market opens tomorrow, marking its second report since General Electric's split into three separate companies earlier this year. Analysts are expecting earnings of $0.99 per share on revenue of $8.44 billion.
The company's stock has shown a 58% gain so far this year, but has traded in a very tight range between $150-170 since its Q1 earnings report. Investors are cautious given some of the recent conservative commentary from bot Airbus and Boeing, however support levels have held up the past couple of months.
Analysts predict GE Aerospace's revenue to grow year-over-year despite challenges in the airplane manufacturing market. Bank of America analysts suggest that GE could be strongly positioned within the sector due to its diverse product offerings and customer base.
In April, GE Aerospace provided guidance for full-year revenue growth in the low double digits, earnings per share between $3.80 and $4.05, and free cash flow above $5 billion. Analysts expect full-year EPS of $4.07, slightly above the company's high-end guidance.
GE Aerospace recently raised its quarterly dividend by 250%, from $0.08 to $0.28 per share, highlighting its commitment to returning capital to shareholders. The company's strong earnings in the first quarter generated $1.7 billion in free cash flow, and analysts are watching for potential further dividend increases.
GE Aerospace continues to benefit from strong demand for its commercial and military jet engines, including the Leap engine for Boeing's 737 Max and Airbus's A320neo, and the GEnx engine for Boeing's 747 and 787 jets. However, some analysts express concerns about the supply chain's ability to meet growing demand. The aftermarket business has seen a boost as airlines hold on to older jets due to production issues with new models.
Jefferies analysts are optimistic, raising their Q2 and 2024 EPS estimates based on a higher aftermarket mix and continued supply chain pressures into 2025. They highlight that GE Aerospace's investment in expanding production capacity and technology, particularly in its Pune, India facility, supports the company's growth ambitions. Jeffeeries maintains a buy rating with a price target of $185, noting the strong position of GE Aerospace in both widebody and narrowbody markets.
Despite industry uncertainties, such as Boeing's safety issues and Airbus lowering its full-year guidance, GE Aerospace is expected to withstand these challenges.
Overall, GE Aerospace is anticipated to report solid Q2 earnings, driven by strong demand for its engines and effective inventory management. The company's strategic investments and commitment to returning capital to shareholders position it well for future growth, despite potential industry challenges. Investors and analysts will closely watch the detailed earnings breakdown and guidance updates in the upcoming report.