General Electric Co (NYSE:GE) stock fell 0.81% (As on January 24, 11:24:46 AM UTC-4, Source: Google Finance) after the company flagged a lower-than-expected profit in the current quarter after fourth-quarter earnings topped forecasts on strong demand for parts and services at its jet engine business. GE’s aviation business has been riding a surge in demand for aftermarket services as a strong rebound in travel and a shortage of new jets prompt airlines to keep their planes in the air for longer periods. The grounding of Boeing’s 737 MAX 9 airplanes for safety checks after a cabin panel fell off during an Alaska Airlines flight this month as well as a snag with rival RTX’s Pratt & Whitney Geared Turbofan (GTF) engines are expected to keep the demand high for aftermarket services. Meanwhile, the company has received total proceeds of $2.0 billion in the quarter from the sale of its remaining AerCap shares. During 2023, GE monetized approximately $9 billion in proceeds from exiting its Baker Hughes and AerCap stakes and a portion of its GE HealthCare shares.
GE in the fourth quarter of FY 23 has reported the adjusted earnings per share of $1.03, beating the analysts’ estimates for the adjusted earnings per share of 91 cents. The company had reported the adjusted revenue growth of 15 percent to $19.42 billion in the fourth quarter of FY 23.
Additionally, the company has repurchased, under the $3 billion authorized repurchase program, approximately 2.2 million common shares for $0.3 billion in the fourth quarter, bringing the total common shares repurchased under the program in 2023 to approximately 10.6 million shares for $1.1 billion.
The Boston, Massachusetts-based company expects an adjusted profit of 60-65 cents a share in the quarter through March compared with 72 cents a share expected by analysts in a LSEG survey. The company said the aerospace business, which makes engines for jets of Boeing and Airbus, is expected to report $6 billion to $6.5 billion in adjusted operating profit in 2024 and more than $5 billion in free cash flow.
In addition, GE, which has completed the separation of its health care business, said that it would spin off its energy businesses, including renewables, into a separate company in early April. As a result, it provided separate full-year estimates for its energy businesses including renewables and aerospace unit. GE said its portfolio of energy businesses, known as GE Vernova, is estimated to generate revenue of $34 billion to $35 billion and free cash flow of $700 million-$1.1 billion in 2024.