DBEA55AED16C0C92252A6554BC1553B2 Clicky DBEA55AED16C0C92252A6554BC1553B2 Clicky
June 19, 2024
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Along with so many other aviation-related companies., GE is also reporting its earnings. Bank of America had a good summary: “good enough to keep the rally going.”

GE’s numbers were strong – aerospace revenues were up 28%, and orders were up 37% compared to last year. Renewables also did well, and it seems the sale of this business could improve the company’s fortunes.

Yesterday we learned of the P&W GTF’s latest issue – after several issues over the past years.  While the LEAP and GTF have had to overcome challenges, the LEAP’s record is less spotty.  Both engines have pushed state-of-art engine technologies.  Commercial aircraft operators are among the most risk-averse business you can find. The LEAP is likely to benefit from its better reliability track record.  Big customers like IndiGo switching from the GTF to LEAP may be a harbinger of what to expect. Moreover, as Boeing ramps MAX production, GE will see even greater demand for the LEAP.

GE raised 2023 earnings guidance and free cash flow forecast as quarterly results beat expectations. Analysts’ consensus was for earnings at 46c/share, and they came in at 68c/share. GE is critical to the aerospace supply chain and benefits from the demand for new engines, especially the LEAP.

As Boeing stabilizes its recovery, GE is poised to benefit, too. GE is the #1 engine supplier to Boeing.  GE wins as soon as Boeing gets the 777X certified and starts deliveries. The forthcoming MAX7 and MAX10 certifications are expected to b completed soon, and even more LEAP engines are needed.

We noticed a lot of interest in the future Rise engine in Paris.  Yesterday we saw the first image of that engine (see headline) associated with Boeing’s X-66 testbed.  This follows chatter that Airbus is also interested in deploying that engine on future models.

Provided the commercial aviation sector remains strong, GE looks like having an excellent year.  The only clouds on the horizon are signals that the current surge in what has been termed “revenge travel” may be running out of steam.

author avatar
Addison Schonland
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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