GE Aerospace stock fell hard Tuesday after the airplane and defense manufacturer missed Q3 revenue estimates.
GE Aerospace reported earnings of $1.15 per share adjusted, up 25%, on 6% revenue growth to $8.9 billion. FactSet expected earnings of $1.13 per share adjusted on just over $9 billion in revenue.
GE Aerospace's total orders increased 28% to $12.6 billion. Commercial engines and services orders were up 29%, with more than 20% growth in services and equipment. Meanwhile, defense orders increased 19% for the quarter. However, commercial engines and services revenue rose 8% to $7 billion, missing views for $7.13 billion. Defense and propulsion technology revenue climbed 2% to $2.24 billion, also falling short of expectations for $2.33 billion.
CEO H. Lawrence 'Larry' Culp in the earnings call said GE Aerospace continues to work closely with Boeing and is "committed" to supporting the company as it navigates the ongoing strike and quality control concerns. GE Aerospace is taking steps with suppliers to increase inputs, and is also making progress on durability issues with its LEAP jet engines, Culp said. The company expects 2024 LEAP engine deliveries to be down 10% from last year. Meanwhile, GE Aerospace doesn't see the Boeing 777x delays having any changes from an operational perspective.
GE Aerospace maintained its 2024 adjusted revenue forecast of high single-digit growth. The company lifted its operating profit guidance to range from $6.7 billion to $6.9 billion, up from its prior outlook of $6.5 billion to $6.8 billion. GE Aerospace expects adjusted earnings for the year between $4.20 and $4.35 per share, up from the previous guidance for $3.95 to $4.20 per share. The manufacturer sees free cash flow ranging from $5.6 billion to $5.8 billion. The manufacturer's prior forecast called for $5.3 billion to $5.6 billion in free cash flow.
Commercial engines and services revenue is expected to grow in the low-double digits to midteens, with operating profit up $300 million at the midpoint of its guidance. The company expects defense and propulsion technology revenue to increase in the mid- to high-single digits.
GE Stock
GE stock tumbled 9% Tuesday.
Shares trimmed their gains from a mid-September breakout on the move.
Despite Tuesday's drop, GE Aerospace rallied nearly 74% year-to-date. Shares rocketed 106% from a November 2023 breakout though Monday's close. GE stock is up about 32% since its April spinoff.
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