(Reuters) -General Electric on Tuesday raised its full-year profit forecast on robust demand for jet engine spare parts and services and improved performance in its renewable business.
Shares of the company rose 2.1% before the bell.
Boston, Massachusetts-based GE now expects 2023 adjusted profit per share of $2.55 to $2.65, compared with its earlier forecast of $2.10 to $2.30.
GE’s aviation business, its cash cow, has been lifted by a surge in demand for aftermarket services as a strong rebound in air travel prompted airlines to use jets for longer against the backdrop of shortage of commercial planes.
The company’s joint venture with France’s Safran SA, CFM International, powers Boeing Co’s 737 MAX jetliners and competes with RTX’s Pratt & Whitney for use in Airbus’ 320neo jets.
“Commercial aerospace remains one of the best multi-year growth stories in industrials, in our view, with pent-up demand for aircraft driving production higher, while supply chain bottlenecks should ease,” Wells Fargo analyst Matthew Akers said in a note last week.
Losses at GE’s renewable business narrowed to $317 million from $934 million a year earlier, largely helped by cost cuts.
The renewable business has struggled due to a combination of weak demand, higher raw material and labor costs.
GE, which has completed the separation of its healthcare unit, has said it would spin off its energy businesses, including renewables, into a separate company next year.
“At GE Vernova, our Grid and now Onshore Wind businesses were both profitable this quarter and we expect that performance to improve from here,” CEO Larry Culp said in a statement.
GE said adjusted profit for the quarter through September was $1.62 billion, compared with a profit of $359 million a year earlier.
On a per-share basis, adjusted profit was 82 cents, while adjusted revenue rose 18% to $16.31 billion.
(Reporting by Abhijith Ganapavaram in Bengaluru; Editing by Sriraj Kalluvila)
