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Key Takeaways
- GE Aerospace reports its first earnings as a standalone company Tuesday, after GE completed its split into three separate companies earlier this month.
- The aerospace technology company’s stock has been trending upwards since the split, with JPMorgan analysts calling the company the “the premier large-cap name” in commercial aerospace.
- GE Vernova and GE Healthcare will both post quarterly earnings within a week of GE Aerospace’s Tuesday report.
GE Aerospace ( GE ) is set to post its results for the first time next Tuesday as a stand-alone firm since it was spun off from conglomerate General Electric early this month.
GE Aerospace, the largest division of the iconic conglomerate , was spun off on April 2 as was power business GE Vernova ( GEV ), completing GE’s split into three publicly traded companies that was first announced almost three years ago . GE Healthcare ( GEHC ) was spun off last year.
Analysts expect GE Aerospace to post $8.1 billion in first-quarter revenue, according to estimates compiled by Visible Alpha, along with a net income of $883.48 million, or 81 cents per share. In the first quarter of 2023, GE reported $6.98 billion in revenue for its aerospace segment, along with a “segment profit” or earnings before interest and taxes (EBIT) prior to the split of $1.33 billion. Analysts expect the standalone company to report EBIT of $1.43 billion in Tuesday’s report.
Demand for GE’s airplane engines have been a key revenue driver and will remain in investors’ sights, with analysts suggesting the demand for GE’s airplane engines could be impacted by the slowdown in production from Boeing ( BA ), one of its major clients, after a number of incidents this year have sparked investigations from regulators and limits on production of its 737 Max jets.
However, despite Boeing’s struggles, the airline industry has had a relatively strong start to the year, with a number of airlines including United ( UAL ), Alaska Airlines ( ALK ), and Delta ( DAL ) recording strong revenue numbers and reporting robust demand for travel. Military conflicts in Ukraine and the Middle East could also boost GE Aerospace’s results, as a supplier for military aircraft.
JPMorgan analysts said in a note after GE Aerospace’s split into a separate company that they viewed GE Aerospace as “the premier large-cap name” in the commercial aerospace industry.
With GE’s split into three now complete, analysts have reevaluated their price calls on GE Aerospace. Those targets have so far ranged between $150 and $190, with the average of $170 over 12% above GE Aerospace’s price of $150.88 as of 2:45 p.m. ET Monday.
The aerospace technology company’s stock has been trending upward since the split, receiving a boost when the company announced it would increase its quarterly dividend to 28 cents per share from 8 cents.
GE Vernova will report earnings Thursday, while GE Healthcare will post its results next Tuesday.