General Electric Co. raised its full-year guidance and reported second-quarter results that blew past Wall Street’s expectations as the manufacturer capitalizes on rebounding renewable-energy orders and an air travel boom that continues to drive demand for jet engines.
Adjusted earnings in 2023 will be $2.10 to $2.30 a share, the maker of aerospace and power-generation equipment said Tuesday in a statement. That’s up from no more than $2 and above the $2.05 average of analyst estimates compiled by Bloomberg. GE now expects free cash flow of as much as $4.6 billion compared to no more than $4.2 billion under its prior outlook.
The results mark “a solid first half of the year,” Chief Executive Officer Larry Culp said in the statement. The company boosted its guidance “as market strength and the lean transformation within our more focused businesses drive significant profit and cash improvement.”
GE’s shares rose 1.4% as of 6:21 a.m. before regular trading in New York.
The stock has soared nearly 70% this year amid renewed investor interest in the once-sprawling conglomerate as Culp prepares the company to become a pure-play aerospace manufacturer by early next year. GE has said it plans to more than double earnings this year amid booming demand for jet engines and maintenance services at GE Aerospace, which generates the majority of company profits.
Since becoming CEO in 2018, Culp has sold huge businesses, slashed debt and overhauled factory operations to reshape the iconic corporation from a troubled giant to a smaller, more streamlined company. GE Aerospace, which primarily manufacturers and services military and commercial jet engines, will become a standalone business next year following the early 2024 spinoff of GE Vernova, the power-generation and renewable-energy units.
Adjusted earnings were 68 cents per share in the second quarter, well above of the 46-cent average of analyst estimates. Revenue soared 19% to $15.9 billion compared $14.7 billion expected by Wall Street.
Free cash flow — a closely watched measure of earnings power by GE investors — was $415 million, better than the $153 million estimated by analysts.
GE Aerospace orders surged 37% in the quarter. Profit margins expanded slightly as as the company continued to deal with ongoing supply-chain headaches and shipped more loss-making new engines to Boeing Co. and Airbus SE.
Sales at GE Renewable Energy grew 27% organically, helped higher equipment deliveries at its wind turbine and grid businesses. The business lost $359 on an operating basis — a modest improvement from a year ago — amid an ongoing turnaround of GE’s wind turbine business.