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GE Aerospace forecast double-digit profit growth this year as the US jet engine maker capitalised on strong demand for its services and spare parts after aircraft shortages have forced airlines to fly older planes for longer.
The company, one of the world’s top four jet engine makers alongside Rolls-Royce, Pratt & Whitney and Safran, beat Wall Street expectations in the fourth quarter. Shares in the company rallied more than 8 per cent on Thursday as it also announced plans to buy back $7bn worth of stock this year and to boost its dividend by 30 per cent.
The group was spun out of General Electric following the conglomerate’s break-up last year. Chief executive Larry Culp said its performance “capped off a monumental first year as a standalone company with $1.7bn of profit growth and $1.3bn of free cash flow growth”.
For 2025, GE Aerospace is forecasting adjusted earnings per share of between $5.10 and $5.45, up from $4.60 in 2024.
New orders for 2024 were up 32 per cent to $50bn, including $15.5bn in the fourth quarter alone, an increase of 46 per cent on the same period the year before. Adjusted revenues were up 10 per cent to $35.1bn and operating profit was up 30 per cent to $7.3bn.
Profit at GE Aerospace’s key commercial engines and services segment rose 44 per cent to $2.16bn in the fourth quarter, on revenues of $7.65bn.
Like its peers, the company is benefiting from industry shortages of new aircraft. Jet engine makers typically sell their product at a discount but benefit from lucrative, long-term, service contracts while their engines are flying.
Despite the strong results, Culp said the company continued to see supply chain constraints and was working with “15 or so critical suppliers”. Last year, GE Aerospace was forced to cut its delivery estimates for the Leap engines it builds with France’s Safran and which power both Airbus and Boeing narrow-body aircraft, mainly used for short-haul flights.
Culp told investors that, although in hindsight, the progress the company made on the supply chain was “significant . . . it came in fits and starts”, adding that this would continue in 2025.
Nevertheless, Culp said GE Aerospace was coming into 2025 far better prepared for the ramp up in output planned by Airbus and Boeing than last year.
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