GE Aerospace announces its fourth quarter and 2024 results early Thursday. The jet engine and aerospace parts manufacturer provided an optimistic preview for its performance in early December. GE stock has been building the right side of a base.
↑
X
S&P 500 Hits New High As AI Stocks Lead; Oracle, Palantir, CrowdStrike In Focus
GE Aerospace (GE) on Dec. 6 said it expects to achieve its 2024 full-year guidance for high single-digit revenue growth, with $6.7 billion to $6.9 billion in operating profit, and $5.6 billion to $5.8 billion in free cash flow.
The company noted that new engine output, internal shop visits and spare parts continue to be paced by materials deliveries from suppliers. GE noted it has made progress on increasing its material input sequentially, however it still remains below demand. The company is making trade-offs between original equipment and aftermarket demand with the materials it has. Meanwhile, GE Aerospace’s aftermarket demand remains robust, with strong orders and shop visit inductions outpacing its output each quarter.
GE said it may limit growth to some parts of its business in 2024, but the demand will push into the future.
The Boeing (BA) strike last fall caused a slowdown in GE LEAP 1-B jet engine deliveries, while other supplier bottlenecks have hindered new engine deliveries.
Still, planes flying for longer provide a boost to the GE’s aftermarket business, which has higher margins than its original equipment segment.
The company’s backlog for its Defense & Propulsion Technology (DPT) is up about $1 billion from last year to around $18 billion. However, there are a few headwinds from the back half of the year impacting performance.
GE Aerospace noted that its output of higher-margin marine engines was challenged, which led to an unfavorable engine mix. Uncertainty regarding the U.S. government budget prompted GE to self-fund its research and development for the time being. The company also expects lower investments in its Catalyst engine in 2025 as it nears certification.
For Q4, FactSet expects GE Aerospace to report earnings of $1.04 per share on $9.49 billion in revenue.
However, year-ago comparisons are muddied by the breakup of General Electric, which saw its jet engine and energy businesses emerge as independent companies last April.
GE Vernova (GEV), which got General Electric’s energy assets, rallied Wednesday to fresh highs despite a revenue miss.
Boeing earnings are due on Jan. 28.
2025 Preview
GE Aerospace in its update said it is positioned to deliver continued revenue, profit and free cash flow growth for 2025.
For its Commercial Engines & Services (CES) business, GE Aerospace expects services to increase in the low-double-digits from a “significant” backlog of shop visit demand, LEAP services growth, mature fleets flying longer and pricing. The manufacturer predicts spare part sales will be in-line with overall services growth. GE forecasts original equipment (OE) will outpace services, with 15% to 20% growth in its LEAP engine family output.
The company also expects defense revenues to grow in the mid to high single-digits, with profit outpacing revenue gains.
GE Aerospace Stock Builds A Base
GE stock is building the right side of a base with a 194.80 buy point.
Shares rebounded from the 200-day line on Jan. 13. On Jan. 14, GE Aerospace pushed above its 50-day moving average and broke a downtrend, offering an early entry.
GE stock ticked up 0.5% to 188.36 Wednesday.
GE Aerospace has advanced nearly 13% in 2025.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
YOU MAY ALSO LIKE:
Best Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists
Looking For The Next Big Stock Market Winners? Start With These 3 Steps
Join IBD Live And Learn Top Chart Reading And Trading Techniques From Pros
Learn How To Time The Market With IBD’s ETF Market Strategy
S&P 500 Hits High As AI Stocks Run On ‘Stargate’ Plan
