GE Aerospace Earnings Surpass Estimates in Q3, Increase 25% Y/Y

GE Aerospace GE has reported third-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.It is worth noting that in April 2024, GE Aerospace emerged as a separate public company, following the spin-off of GE Vernova Inc. GEV from General Electric.Inside the HeadlinesThe company’s third-quarter adjusted earnings were $1.15 per share, which beat the Zacks Consensus Estimate of $1.13. The bottom line rose 25% year over year.Total revenues were $9.84 billion, indicating a year-over-year increase of 6%. Total orders grew 28% on a year-over-year basis to $12.6 billion.Adjusted revenues were $8.94 billion, marking a year-over-year rise of 6%. However, the metric missed the consensus estimate of $8.97 billion.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.GE Aerospace Price, Consensus and EPS Surprise  GE Aerospace price-consensus-eps-surprise-chart | GE Aerospace QuoteSegmental DiscussionRevenues from the company’s Commercial Engines & Services business jumped 8.4% year over year to $7 billion. The results were driven by robust orders for both services and equipment with strong spare parts demand. Total orders in the segment rose 29% year over year to $9.8 billion.The Defense & Propulsion Technologies segment’s revenues totaled $2.2 billion, up 1.7% year over year. Results benefited from the strong momentum in the defense & propulsion technologies business. Total orders in the segment increased 19% year over year to $3 billion.Margin ProfileGE Aerospace’s cost of sales (comprising costs of equipment and services sold) grew 4% year over year at $6.23 billion. Selling, general and administrative expenses increased 32.9% year over year to $1.33 billion. Research and development expenses totaled $331 million, reflecting a year-over-year rise of 34%.GE Aerospace’s adjusted operating profit was $1.82 billion, up 14% year over year. The margin was 20.3%, up 150 basis points.Balance Sheet & Cash FlowExiting the third quarter, GE Aerospace had cash, cash equivalents and restricted cash of $13.7 billion compared with $15.2 billion at the end of December 2023. The company’s long-term borrowings were $18.2 billion compared with $19.4 billion at the end of December 2023.For the first nine months of 2024, the adjusted free cash flow was $4.57 billion compared with $3.49 billion in the year-ago period.In the first nine months of the year, GE rewarded its shareholders with a dividend payment of $702 million, up 40.1% year over year. The company repurchased 19.6 million shares for $3.3 billion during the same period.OutlookFor 2024, GE expects adjusted revenues to grow in the high-single-digit range from the year-ago period's actual. Operating profit is estimated to be $6.7-$6.9 billion compared with the $6.5-$6.8 billion guided earlier. Adjusted earnings are predicted to be $4.20-$4.35 per share, higher than the $3.95-$4.20 previously mentioned. The free cash flow is anticipated to be $5.6-$5.8 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 low-double digits to mid-teens, whereas operating profit is anticipated to be $6.6-$6.8 billion. For the Defense & Propulsion Technologies segment, revenues are projected to increase in the mid-single to high-single-digit range, whereas operating profit is anticipated to be $1.0-$1.3 billion.Zacks Rank & Stocks to ConsiderGE Aerospace presently carries a Zacks Rank #3 (Hold). A couple of better-ranked companies are discussed below:Markel Group Inc. MKL currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.MKL delivered a trailing four-quarter average earnings surprise of 35.4%. In the past 60 days, the Zacks Consensus Estimate for Markel’s 2024 earnings has increased 1.8%.Parker-Hannifin Corporation PH currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 11.2%.In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 (ending June 2025) earnings has increased 0.3%.Infrastructure Stock Boom to Sweep AmericaA massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.The only question is “Will you get into the right stocks early when their growth potential is greatest?”Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How To Profit From Trillions On Spending For Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GE Aerospace (GE): Free Stock Analysis Report Parker-Hannifin Corporation (PH): Free Stock Analysis Report Markel Group Inc. (MKL): Free Stock Analysis Report GE Vernova Inc. (GEV): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks