GE's First-Quarter Projection Falls Short, Leading to Share Decline

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Pre-market trade witnessed a 2% decline in the company's shares following the announcement.

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The Boston-based company foresees a gradual improvement in profit for its renewable business in the second half of the year, but the first quarter's performance is anticipated to mirror that of the fourth quarter.

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GE Vernova, the renewable business unit within the company's energy portfolio, has incurred losses for the past two years, although its fourth-quarter losses narrowed compared to the previous year.

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GE's Chief Financial Officer, Rahul Ghai, explained during an earnings call that there is a lag between order and revenue conversion, contributing to the back-end loading of improvements in the renewables sector.

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GE's aviation business, experiencing heightened demand for aftermarket services due to increased travel and a shortage of new jets, particularly benefits from the robust performance of its jet engine business.

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The aerospace business, responsible for manufacturing engines for Boeing and Airbus jets, is expected to report $6.0 billion to $6.5 billion in adjusted operating profit in 2024 and over $5 billion in free cash flow.

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Ongoing issues such as the grounding of Boeing's 737 MAX 9 airplanes for safety checks and challenges with RTX's Pratt & Whitney Geared Turbofan (GTF) engines are projected to maintain high demand for aftermarket services.

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J.P. Morgan analyst Seth Seifman noted that despite recent challenges, the commercial aerospace aftermarket remains the safest segment of the sector into earnings, with robust demand and resilient pricing power.

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