General Electric (GE) -) posted stronger-than-expected second quarter earnings Tuesday, and lifted its full-year profit guidance, thanks in part to solid demand from its aerospace business and record orders in its renewable energy division.
General Electric said adjusted non-GAAP earnings for the three months ending in June were pegged at 68, down 13% from last year but firmly ahead of the Street consensus forecast of 46 cents per share. Group adjusted revenues, General Electric said, fell 14.6% from last year to $15.92 billion, well ahead of analysts' estimates of an $15 billion tally.
Looking into the current financial year, GE said it sees adjusted earnings in the region of $2.10 to $2.30 per share, a 50 cents improvement from the higher end of its prior forecast, with organic sales growth in the 'low double-digit' range in terms of percentage gain.
GE also lifted its key free-cash flow estimate to a range of between $4.1 billion to $4.6 billion from its prior forecast of between $3.6 billion and $4.2 billion.
Operating profits for GE Aerospace, its core division, were forecast in the range of $5.6 billion to $5.9 billion. GE Vernova, its energy business, will likely report a loss of between $400 million and $100 million.
"GE's second-quarter performance was strong, building on our first-quarter momentum and marking a solid first half of the year. Orders and revenue grew double digits, led by robust services growth across our portfolio, increased demand at GE Aerospace and record Renewable Energy orders," said CEO Larry Culp. "Today, we are raising our full-year guidance as market strength and the lean transformation within our more focused businesses drive significant profit and cash improvement across GE.”
"GE Aerospace is growing rapidly, executing on the ramp for customers and building services strength, while GE Vernova advances toward its spin-off as Renewable Energy improves and Power continues to deliver. Each business has its own critical mission and focus," he added. "We’re increasingly operating as GE Aerospace and GE Vernova as we prepare to launch these two independent companies sometime in early 2024.”
General Electric shares were marked 5.8% higher in early afternoon trading following the earnings release to change hands at $116.63 each, a move that would extend the stock's year-to-date gain to nearly 77%.
GE Aerospace, which makes plane engines for both Boeing BA and its European rival Airbus -- through a joint venture with France's Safran -- boosted $9.45 billion in new orders over the three months ending in June, while reporting a 28% increase in revenues and posted a segment profit of $1.479 billion.
In GE's renewables business, which is part of the Vernova division, new orders were pegged at $8.29 billion. In its power unit, also part of Vernova, new orders were up 7% to $4.35 billon.
