GE Aerospace has announced a strong third quarter performance, exceeding analyst expectations and boosting its outlook for the year. The company reported adjusted revenue growth of 6% year-over-year, reaching $8.943 billion, surpassing the analyst consensus of $9.022 billion. GAAP revenue came in at $9.84 billion.
This impressive performance was fueled by a significant surge in orders, which increased by 28% year-over-year to $12.6 billion. The growth was driven by both Commercial Engines & Services, with a 29% increase, and Defense & Propulsion Technologies, which saw a 19% increase.
Segment-wise, Commercial Engines & Services generated $7.0 billion in revenue, representing an 8% year-over-year increase. Meanwhile, Defense & Propulsion Technologies contributed $2.243 billion, marking a 2% year-over-year growth.
The company’s adjusted profit margin expanded by 150 basis points to 20.3%, leading to an adjusted operating profit of $1.818 billion, a 14% year-over-year jump.
GE Aerospace’s CEO, H. Lawrence Culp, Jr., highlighted the company’s positive performance. He emphasized the robust demand that drove the substantial increase in orders. He also pointed out the significant contribution of services to both earnings growth and free cash flow generation. Culp expressed confidence in the company’s future, noting that the strong results and positive Q4 expectations led to the upward revision of earnings and cash guidance for the year.
Culp also addressed the company’s efforts to improve engine deliveries, noting a sequential improvement of over 20% and increased aftermarket capacity.
The company’s adjusted EPS for the quarter reached $1.15, a 25% increase year-over-year, beating the consensus of $1.14.
GE Aerospace’s financial strength is also evident in its cash flow performance. Cash from operating activities for the nine months ended September 30, 2024, reached $4.49 billion, a 34% year-over-year increase. Adjusted free cash flow saw a 31% rise during the same period.
The company remains committed to shareholder value, demonstrating this by repurchasing 7.9 million shares for $1.3 billion under its $15 billion repurchase program announced in March 2024.
Looking ahead, GE Aerospace has revised its guidance for the year. The company now anticipates adjusted revenue growth in the high single digits. Adjusted EPS is expected to be in the range of $4.20 – $4.35, an increase from the previous guidance of $3.95 – $4.20. This surpasses the consensus of $4.25. The company also expects adjusted operating profit of $6.7 billion – $6.9 billion, compared to the previous forecast of $6.5 billion – $6.8 billion. Adjusted free cash flow is projected to be between $5.6 billion – $5.8 billion, an upward revision from the prior range of $5.3 billion – $5.6 billion.
Despite the positive performance and upgraded guidance, GE shares are trading lower by 4.91% at $184.70 premarket on Tuesday. This premarket decline may be influenced by various market factors and investor sentiment.