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GE Aerospace (GE) Q2 Earnings Beat Estimates, Rise Y/Y
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GE Aerospace (GE - Free Report) reported second-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
It’s worth noting that in April 2024, GE Aerospace emerged as a separate public company, following the spin-off of GE Vernova Inc. (GEV - Free Report) from General Electric.
Inside the Headlines
The company’s second-quarter adjusted earnings were $1.20 per share, which beat the Zacks Consensus Estimate of 97 cents. The bottom line surged 62.2% year over year.
Total revenues were $9.09 billion, indicating an increase of 4% year over year. Total orders grew 18% on a year-over-year basis to $11.2 billion.
Adjusted revenues were $8.22 billion, marking an increase of 4% year over year. However, the metric missed the consensus estimate of $8.38 billion.
Revenues from the company’s Commercial Engines & Services business jumped 7% year over year to $6.1 billion. The results were driven by robust orders for both services and equipment with strong spare parts demand. Total orders in the segment surged 38% year over year to $9.2 billion.
The Defense & Propulsion Technologies segment’s revenues totaled $2.4 billion, up 1% year over year. Results benefited from strong momentum in the defense & propulsion technologies business. Total orders in the segment declined 25% year over year to $2.3 billion, owing to the timing of orders in the Defense & Systems business.
Margin Profile
GE Aerospace’s cost of sales remained relatively stable year over year at $5.6 billion. Selling, general and administrative expenses increased 1.2% year over year to $924 million. Research and development expenses totaled $300 million, reflecting an increase of 25.5% year over year.
GE Aerospace’s operating profit was $1.4 billion, down 6.7% year over year. The margin in the quarter was 15.9%, down 130 basis points.
Balance Sheet and Cash Flow
Exiting second-quarter 2024, GE Aerospace had cash, cash equivalents and restricted cash of $12.1 billion compared with $15.2 billion at the end of December 2023. The company’s long-term borrowings were $18 billion compared with $19.4 billion at the end of December 2023.
For the first six months of 2024, adjusted free cash flow was $2.77 billion compared with $1.77 billion in the year-ago period.
In the first six months of the year, GE rewarded its shareholders with a dividend payment of $394 million, up 12.6% year over year. The company repurchased 12.8 million shares for $2 billion during the same period.
Outlook
For 2024, GE expects adjusted revenues to grow in the high-single-digit range from the year-ago period. Operating profit is estimated to be in the range of $6.5-$6.8 billion. Adjusted earnings are predicted to be in the band of $3.95-$4.20 per share. Free cash flow is anticipated to be in the range of $5.3-$5.6 billion, with the conversion rate projected to be more than 100%.
GE Aerospace expects the Commercial Engines & Services segment’s revenues to grow in the range of low-double-digits to mid-teens while operating profit is anticipated to be in the band of $6.3-$6.5 billion. For the Defense & Propulsion Technologies segment, revenues are projected to increase in the mid-single-digits to the high-single-digits range while operating profit is anticipated to be in the band of $1.0-$1.3 billion.
Zacks Rank & Other Stocks to Consider
GE Aerospace presently carries a Zacks Rank #2 (Buy).
A couple of other top-ranked companies are discussed below:
It has a trailing four-quarter average earnings surprise of 1.7%. The Zacks Consensus Estimate for HON’s 2024 earnings has increased 2.9% in the past 60 days.
Carlisle Companies Incorporated (CSL - Free Report) carries a Zacks Rank of 2. CSL delivered a trailing four-quarter average earnings surprise of 17%. In the past 60 days, the Zacks Consensus Estimate for CSL’s 2024 earnings has increased 0.6%.
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GE Aerospace (GE) Q2 Earnings Beat Estimates, Rise Y/Y
GE Aerospace (GE - Free Report) reported second-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
It’s worth noting that in April 2024, GE Aerospace emerged as a separate public company, following the spin-off of GE Vernova Inc. (GEV - Free Report) from General Electric.
Inside the Headlines
The company’s second-quarter adjusted earnings were $1.20 per share, which beat the Zacks Consensus Estimate of 97 cents. The bottom line surged 62.2% year over year.
Total revenues were $9.09 billion, indicating an increase of 4% year over year. Total orders grew 18% on a year-over-year basis to $11.2 billion.
Adjusted revenues were $8.22 billion, marking an increase of 4% year over year. However, the metric missed the consensus estimate of $8.38 billion.
GE Aerospace Price, Consensus and EPS Surprise
GE Aerospace price-consensus-eps-surprise-chart | GE Aerospace Quote
Segmental Discussion
Revenues from the company’s Commercial Engines & Services business jumped 7% year over year to $6.1 billion. The results were driven by robust orders for both services and equipment with strong spare parts demand. Total orders in the segment surged 38% year over year to $9.2 billion.
The Defense & Propulsion Technologies segment’s revenues totaled $2.4 billion, up 1% year over year. Results benefited from strong momentum in the defense & propulsion technologies business. Total orders in the segment declined 25% year over year to $2.3 billion, owing to the timing of orders in the Defense & Systems business.
Margin Profile
GE Aerospace’s cost of sales remained relatively stable year over year at $5.6 billion. Selling, general and administrative expenses increased 1.2% year over year to $924 million. Research and development expenses totaled $300 million, reflecting an increase of 25.5% year over year.
GE Aerospace’s operating profit was $1.4 billion, down 6.7% year over year. The margin in the quarter was 15.9%, down 130 basis points.
Balance Sheet and Cash Flow
Exiting second-quarter 2024, GE Aerospace had cash, cash equivalents and restricted cash of $12.1 billion compared with $15.2 billion at the end of December 2023. The company’s long-term borrowings were $18 billion compared with $19.4 billion at the end of December 2023.
For the first six months of 2024, adjusted free cash flow was $2.77 billion compared with $1.77 billion in the year-ago period.
In the first six months of the year, GE rewarded its shareholders with a dividend payment of $394 million, up 12.6% year over year. The company repurchased 12.8 million shares for $2 billion during the same period.
Outlook
For 2024, GE expects adjusted revenues to grow in the high-single-digit range from the year-ago period. Operating profit is estimated to be in the range of $6.5-$6.8 billion. Adjusted earnings are predicted to be in the band of $3.95-$4.20 per share. Free cash flow is anticipated to be in the range of $5.3-$5.6 billion, with the conversion rate projected to be more than 100%.
GE Aerospace expects the Commercial Engines & Services segment’s revenues to grow in the range of low-double-digits to mid-teens while operating profit is anticipated to be in the band of $6.3-$6.5 billion. For the Defense & Propulsion Technologies segment, revenues are projected to increase in the mid-single-digits to the high-single-digits range while operating profit is anticipated to be in the band of $1.0-$1.3 billion.
Zacks Rank & Other Stocks to Consider
GE Aerospace presently carries a Zacks Rank #2 (Buy).
A couple of other top-ranked companies are discussed below:
Honeywell International Inc. (HON - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
It has a trailing four-quarter average earnings surprise of 1.7%. The Zacks Consensus Estimate for HON’s 2024 earnings has increased 2.9% in the past 60 days.
Carlisle Companies Incorporated (CSL - Free Report) carries a Zacks Rank of 2. CSL delivered a trailing four-quarter average earnings surprise of 17%. In the past 60 days, the Zacks Consensus Estimate for CSL’s 2024 earnings has increased 0.6%.