What You Need To Know Ahead of GE Aerospace’s Earnings Report Tuesday

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.