GE Aerospace (NYSE:GE) reported better-than-expected first quarter financial results, driven by sharp growth in its commercial engines and services business and a significant increase in orders.
The company reported adjusted earnings per share (EPS) of $1.86, above the $1.60 analyst estimate, and adjusted revenue of $11.61 billion, compared with expectations of $10.71 billion.
Total GAAP revenue was $12.4 billion, up 25% year-over-year, while adjusted revenue increased 29%.
GE Aerospace said total orders for the quarter reached $23 billion, an 87% increase from the prior year period, supported by demand for commercial engine services, which rose 39%.
On a GAAP basis, net profit was $2.2 billion. Adjusted operating profit was $2.5 billion, up 18% year-over-year, while adjusted operating margin was 21.8%, down 200 basis points.
Cash from operating activities totaled $1.9 billion, an increase of 21%, and free cash flow was $1.7 billion, up 14%.
During the quarter, GE Aerospace reported commercial engine agreements involving carriers including American Airlines, United Airlines, and Delta Air Lines, covering more than 650 engines. It also signed a long-term materials agreement with Ryanair.
The company said its commercial services backlog exceeded $170 billion, with total backlog above $210 billion.
GE Aerospace CEO H. Lawrence Culp Jr said growth in orders, revenue, and cash flow reflected continued demand in commercial aviation, particularly in services. He noted the company’s commercial services backlog and fleet profile as supporting factors for its performance.
“With the dynamic geopolitical landscape, we're holding our full-year guidance across the board and are trending toward the high-end of the range given our strong start to the year,” Culp said.
Despite the stronger-than-expected results, shares traded lower in early market activity, as investors focused on margin pressure, softer outlook assumptions for aircraft departures growth, and broader macroeconomic uncertainty, including fuel costs and geopolitical risks.
The stock fell 4% to about $291 in early trade on Tuesday.