GE Aerospace raises earnings goal on strong engine sales

General Electric Co. raised the full-year profit guidance for its aerospace business, driven by an increase in revenue from commercial aircraft engines and services. 

Operating profit this year will reach $6.2 billion to $6.6 billion, GE said in a statement on Tuesday, raising its guidance from as much as $6.5 billion. The company also provided an outlook for adjusted earnings per share, which will come in at $3.80 to $4.05.

GE shares gained as much as 5.8% in premarket trading in New York. 

The report is GE’s first since the April 2 spin off of GE Vernova Inc., its energy businesses. In the first quarter, GE Aerospace saw operating profit rise 24% to $1.5 billion, while sales advanced 15% to $8.1 billion. 

The creation of a standalone GE Aerospace followed the breakup of the storied engineering company. GE is the world’s largest producer of jet engines, powering workhorse aircraft such as Airbus SE’s A320neo as well as Boeing Co.’s 737 Max and 787 Dreamliner. It also boasts a large and profitable services business benefiting from strong demand for air travel.

In March, GE Aerospace said that it expects to generate more than $5 billion of free cash flow this year, and adjusted revenue would grow in the low double digits or more. On Tuesday, GE reiterated those goals.

It has also announced plans to pay a significant dividend for the first time since 2018, when Chief Executive Officer Larry Culp slashed the payout in one of his first moves after taking over.

Analysts have said GE stands to benefit from additional parts and services work as airlines keep more of their existing fleets in the air due to production difficulties at Boeing.