GE Aerospace (NYSE: GE) GE Aerospace reported a better-than-expected quarter on continued strong demand for aircraft and engine parts. Investors are taking notice, sending GE Aerospace shares up 8% in midday trading.
High prices lead to higher profits
GE Aerospace is the last remnant of the former General Electric conglomerate. The company is a major manufacturer of aircraft engines and other equipment.
GE earned $1.20 per share in the second quarter, beating Wall Street’s consensus of $0.98 per share, despite revenue of $8.22 billion, about $200 million below expectations. Total orders rose 18 percent to $11.2 billion, and GE generated $1 billion in cash from operating activities.
“The GE Aerospace team delivered another strong quarter, driven by double-digit increases in orders, operating income and free cash flow,” CEO H. Lawrence Culp Jr. said in a statement. “Given our year-to-date performance and the momentum in our business, we are raising our full-year earnings and free cash flow guidance.”
GE now expects full-year profit of $3.95 to $4.20 per share, up from $3.80 to $4.05 previously. The consensus had been for earnings of $4.08 per share.
Is GE Aerospace a Buy?
The results were better than expected despite supply chain constraints that weighed on revenue. Investors can draw the following conclusion: On the commercial side, GE can market all the products it can bring to market.
That’s unlikely to change anytime soon, which puts the company on a good track for the quarters ahead. Airlines companies are beginning to see some pullback after years of growing demand, but the industry remains relatively healthy and with problems ahead Boeing and elsewhere, by limiting supplies of new aircraft coming to market, the parts market, or spare parts market, should continue to be strong going forward.
For investors interested in investing in strong trends in aerospaceGE is an interesting option.
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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why GE Aerospace Stock Is Soaring Today was originally published by The Motley Fool
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