Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

GE posts higher earnings on recovery in aviation industry

Stock Markets Jul 26, 2022 11:11AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: The logo of U.S. conglomerate General Electric is pictured at the site of its energy branch in Belfort, France, February 5, 2019. REUTERS/Vincent Kessler/File Photo

By Rajesh Kumar Singh and Abhijith Ganapavaram

CHICAGO (Reuters) -General Electric Co on Tuesday surprised Wall Street with higher quarterly profit and positive cash flow as recovery in the aviation industry propelled its jet engine business, sending its shares higher.

The Boston-based industrial conglomerate, however, said it was still grappling with supply-chain disruptions and inflationary pressures, which would pressure earnings this as well as next year.

"It is a challenging operating environment," Chief Executive Larry Culp told Reuters in an interview.

Supply-chain bottlenecks have made it tougher for the company to deliver products to customers on time. To get around the problem, it is holding higher levels of inventory.

GE said supply-chain and macroeconomic pressures shaved off 5 percentage points from its revenue in the quarter through June.

It reiterated that its full-year results this year were on track to hit the low end of its forecast, but trimmed the full-year free cash flow forecast by about $1 billion.

In January, it projected adjusted profit in 2022 to be in the range of $2.80 to $3.50 per share and expected to generate $5.5 billion to $6.5 billion in free cash flow.

Culp said a "more conservative view" on part of the company was warranted due to economic and policy uncertainties.

The company's shares were up 5.12% at $71.86 in morning trade.

While GE has yet to put out an earnings forecast for next year, Culp said profit and free cash flow in 2023 are now expected to be lower than its previous estimate.

A strong recovery in air travel, meanwhile, has bolstered demand at its engine business, which is the company's cash cow. The unit reported a 27% year-on-year jump in revenue in the second quarter on the back of higher shop visits and spare part sales.

GE expects demand at its aviation unit to remain strong, resulting in more than 20% revenue growth and $3.8 to $4.3 billion operating profit this year.

Raytheon Technologies (NYSE:RTX) Corp, whose Pratt & Whitney segment makes jet engines, has also reported a jump in demand for its engines and aftermarket services.

Profit at GE's healthcare unit, however, is expected to suffer this year due to supply chain disruptions, and freight and raw material inflation.

Those issues along with the expiration of a U.S. wind energy production tax credit have taken a toll on the company's renewable energy business. As a result, GE said it no longer expects an improvement in the business in the second half of the year.

Adjusted profit for the quarter through June came in at 78 cents a share, above analysts' expectations. Quarterly revenue at $18.6 billion also topped Wall Street estimates.

The company reported $162 million in free cash flow in the second quarter.

GE posts higher earnings on recovery in aviation industry

Related Articles

Stocks climb after U.S. jobs report selloff
Stocks climb after U.S. jobs report selloff By Reuters - Aug 08, 2022 7

By Lawrence Delevingne and Tom Wilson (Reuters) - World stock markets gained ground on Monday, recovering from losses sparked by a strong U.S. jobs report last week that bolstered...

Corteva Tailwinds Converging - JPMorgan
Corteva Tailwinds Converging - JPMorgan By - Aug 08, 2022

By Sam Boughedda Agricultural chemical and seed company Corteva's (NYSE:CTVA) shares were moved from Neutral to Overweight by a JPMorgan analyst on Monday. The analyst also boosted...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email