GE Aerospace reported robust 1Q24 results, with strong revenue growth of 15.5% YoY to $8.1 billion and profit increasing by 15.3% YoY to $1.5 billion. Orders also increased by 34% YoY, indicating strength in both Commercial Engines & Services and Defense & Propulsion Technologies. The company raised its FY24 outlook, expecting revenue growth in the lower double-digits and operating profit between $6.2 and $6.6 billion. Following the positive results, GE stock rose by 8.3% on 4/23. Valuation was based on the 2025e EV/EBITDA methodology, with an intrinsic value of $175.00 per share and a ‘Hold’ rating with an implied upside of 8.5% from the current market price.
GE Aerospace’s profit and revenue gains are expected to persist due to strong maintenance and new engine demand. However, margins may edge lower as spare demand rises and new engine builds increase. The company is a market leader in narrow-body and wide-body engines with a strong defense business portfolio. GE Aerospace expects revenue growth in the lower double digits for FY24, with an operating profit between $6.2 and $6.6 billion and adjusted EPS between $3.80 and $4.05 for the year. The company aims to deliver $10 billion in operating profit by 2028 and has authorized a $15 billion share buy-back program.
In terms of other updates, GE Aerospace repurchased common shares, received proceeds from the disposition of GE Healthcare shares, incurred separation costs related to the spin-off of GE Vernova, and made significant strategic agreements in the aerospace industry. The company also announced plans to invest over $650 million in its manufacturing facilities and supply chain. GE Aerospace has a lean operating model called FLIGHT DECK to ensure focused execution and bridge strategy to results. The company aims to accelerate its lean progress in the future.
GE (consolidated) posted strong revenue growth of 10.8% YoY to $16.0 billion in 1Q24, with adjusted sales increasing to $15.2 billion. Operating profit was down due to a decrease in gains and increase in separation costs. GE Aerospace’s 1Q24 performance showed revenue growth of 15.5% YoY to $8.1 billion, driven by pricing, spare parts volume, and increased wide-body and defense deliveries. Commercial Engines & Services revenue rose 16.8% YoY to $6.1 billion, while Defense and Propulsion Technologies revenues increased by 17.3% YoY to $2.3 billion.
In conclusion, GE Aerospace continues to show strong performance and outlook for the future, with revenue growth, operating profit, and adjusted EPS expected to increase in the coming years. The company’s strategic agreements, investments in manufacturing facilities, and lean operating model demonstrate its commitment to driving growth and profitability in the aerospace industry. GE Aerospace remains a key player in the aviation and defense markets, poised for continued success in the years ahead.