General Electric (GE) plans to release its second-quarter results early Tuesday amid signs of improvement in aerospace supply chains, though challenges remain. GE stock rose in the buy range.
RBC Capital Markets analysts expect growth in the second quarter, led by jet engine activity. They also expect GE’s full-year earnings forecast to rise. RBC analyst Deane Dray wrote in a July 12 report that he expects the company to “benefit from the nascent rebound in commercial aerospace.”
GE broke up General Electric Healthcare Technologies (GEHC) at the end of last year. It plans to spin off its energy business, as GE Vernova, in early 2024. This will allow GE Aerospace, the so-called portfolio gem, to emerge as a stand-alone business.
Estimates: Analysts on average expect EPS of 46 cents on revenue of $14.762 billion. Year-over-year comparisons are muddied by GEHC’s fallout.
Results: Come back early on Tuesday.
Outlook: Wall Street sees annual earnings per share of $2.06, above the company’s forecast for $1.70 to $2.
GE also guided 2023 revenue growth in high numbers and free cash flow of $3.6 billion to $4.2 billion.
On Friday, GE shares fell 0.2% to 111.09. Pure future aerospace gambling stocks rose short-term support from their 21-day exponential moving average to a more than 70% gain so far in 2023. In late June, they dipped to bounce off the 50-day moving average, clearing a buy point of 108.90 from a tight three-week pattern. The buy zone moves to 114.35.
GE Aerospace: Improving Supply Chains
At the recent Paris Air Show, GE and Raytheon Technologies (GE) reported improvements in the aerospace supply chain.
Jet engine rivals are trying to ramp up production of new products, like GE’s Leap engine, which powers Boeing (BA) 737 aircraft. But the availability of materials and the shortage of labor remain problems.
Analysts are monitoring the progress of the spin-off of GE’s tougher energy business.
“We will listen (on GE’s earnings call) to see if any of the wind turbine quality issues recently reported to Siemens (SIEGY) have surfaced at GE to any degree,” RBC analyst Dray wrote on July 12.
Amid these ripples, enthusiasm for GE Aerospace propelled GE shares to a more than five-year high.
Year-to-date, GE stock is up 70.6%, including an 11.8% jump in the past three months.
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