Home News GE Aviation earnings could boost overall Q4 performance

GE Aviation earnings could boost overall Q4 performance

by SuperiorInvest

Key things

  • General Electric ( GE ) is expected to report adjusted earnings per share (EPS) of $1.18 for the fourth quarter on Jan. 24, compared with 82 cents in the year-ago period.
  • GE’s revenue could climb nearly 6% to $21.4 billion.
  • GE’s aerospace segment is expected to post a nearly 24% increase in revenue, which will drive company-wide revenue growth.
  • The company’s aviation business has rebounded in recent quarters, amid a surge in air traffic following the outbreak of the pandemic.

General Electric Co. (GE), one of the industry’s biggest companies before it began selling units to stay afloat, is likely to say profit rose in the fourth quarter as its core aerospace business benefited from renewed commercial demand.

GE is likely to say net income rose 44% to $1.3 billion, or adjusted earnings per share (EPS) $1.18, according to Visible Alpha estimates. Revenue likely rose 5.6% to $21.4 billion, the second-biggest increase in several years. GE reports fiscal results before markets open on Jan. 24.

Optimism about GE reflects strong performance from its most successful units, boosted by increased demand after a pandemic-related slump. However, ongoing supply chain and logistics issues are negatively impacting profitability and foreign currency movement could hinder GE’s international business.

The latest quarter was the last before GE completed the first of many planned spinoffs. At the beginning of January, the company’s activities in the healthcare sector began to trade independently under the name GE HealthCare Technologies (GEHC). In 2024, GE will merge its gas and wind turbine division with other energy businesses into a new company called GE Vernova, leaving only its aerospace operations.

GE shares have been rising in recent weeks. Shares fell just under 2%, compared with a more than 5% decline in the S&P 500 Industrial Sector Index over the past year.

TradingView.

GE Key Statistics
Estimate for Q4 FY2022 Current for Q4 FY2021 Current for the 4th quarter of fiscal year 2020
Adjusted earnings per share ($) 1.18 0.82 0.65
Sales ($B) 21.4 20.3 21.0
Aviation Revenue ($B) 7.5 6.1 5.8

Source: Visible Alpha

Key Metric: Aviation Revenue

GE’s Aerospace segment designs and manufactures aircraft engines, mechanical systems and related components that serve both commercial and military customers. It’s linked to the airline industry returning to a COVID-19 slump as China reopens to international travel.

GE’s aerospace business showed accelerated revenue improvement. In each of the last two reporting periods, sales increased by roughly a quarter year-on-year. Analysts expect aviation revenue to rise nearly 24% to $7.5 billion in the quarter.

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