General Electric Raises Full-Year Profit Forecast Amid Surge in Aerospace Business, Shares Rise

Strong Q3 results led by 25% revenue jump in aerospace segment and rebounding air travel demand; GE's renewed optimism mirrored in upward revision of earnings and cash flow projections.

• General Electric Co. has raised its 2023 profit and free cash flow forecast, driven largely by a resurgence in air travel and consequent demand rise in its aerospace business. Adjusted earnings are now expected to reach $2.55 to $2.65 a share, up from an earlier estimate of $2.30 and above the $2.36 average of analysts’ estimates. The sales growth is anticipated to be in the low-teens percentage rate, and free cash flow could rise to as much as $5.1 billion.
• Such growth in GE's aerospace sector can be attributed to robust demand and solid execution. GE's aviation operations are witnessing rapid growth despite dealing with a challenging supply-chain environment.
• GE's shares rose by 6.5 percent on the day of the forecast revision, culminating in a 63 percent surge this year through Monday's close. Notably, this outperforms the gain in the S&P 500 Index. This favorable performance has reflected positively on GE's market position, implying potential for further healthy results, according to market analysts.
• GE's financial performance has improved significantly under the leadership of CEO Larry Culp. Since his appointment in 2018, Culp has implemented a successful five-year turnaround plan transforming GE from a troubled giant to a more streamlined organization. The strong Q3 where the adjusted earnings rose to 82 cents per share is testament to this improvement. One of the key drivers was a 34% jump in orders in GE's Aerospace sector and a 25% growth in revenue.
• GE also plans to complete the spin-off of the GE Vernova energy unit by the beginning of the second quarter of the next year. Apart from the aerospace sector, GE's renewable energy and power segments have also shown considerable growth with revenue increases of 14% and 9% respectively.

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