Oct 24 (Reuters) - General Electric on Tuesday raised its full-year profit forecast for a third time this year after quarterly earnings topped Wall Street estimates on robust demand for jet engine parts and services and a better performance in its renewable business.
GE shares were up 6% at $113.14 in pre-market hours. The Boston-based group now expects 2023 adjusted profit per share of $2.55 to $2.65, compared with an earlier forecast of $2.10 to $2.30.
Free cash flow for the year is estimated to be in a range of $4.7 billion to $5.1 billion, up from $4.1 billion to $4.6 billion expected in July.
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 commercial plane shortages.
"At GE Aerospace, we continue to experience rapid growth driven by robust demand and solid execution, largely in commercial engines and services," CEO Larry Culp said in a statement.
The company's performance contrasts with rival RTX, which reported a near billion-dollar quarterly loss due to a major quality crisis at its subsidiary Pratt and Whitney affecting the popular Geared Turbofan (GTF) engines.
GE's aerospace unit, which makes engines for Boeing Co and Airbus jets, posted double-digit growth in orders, revenue and profit from a year earlier. Its margin expanded by 130 basis points in the quarter from a year ago.
Meanwhile profits at its grid and onshore wind businesses in the quarter helped narrow losses at its renewable unit. Culp expressed confidence that the businesses would continue to improve.
The renewable business has struggled due to a combination of weak demand and higher raw material and labor costs.
GE, which has completed the separation of its healthcare unit, said it would spin off its aerospace and energy, including renewables, businesses into independent companies in the beginning of the second quarter.
Shares of its portfolio of energy businesses, called GE Vernova, will be listed on the New York Stock Exchange under the ticker symbol "GEV". Shares of its aerospace unit will continue GE's listing on the New York Stock Exchange under the ticker symbol "GE", the company said.
GE generated $2.7 billion from the sale of a portion of its shares in AerCap Holdings NV in the third quarter. It said it expects to fully monetize its remaining about 14.5% stake in the aircraft leasing giant in an "orderly manner over time".
Its adjusted profit for the third quarter came in at 82 cents per share, topping an average analysts' expectation of 56 cents per share, LSEG data showed.
Reporting by Rajesh Kumar Singh in Chicago and Abhijith Ganapavaram in Bengaluru; Editing by Sriraj Kalluvila, Jason Neely and Jan Harvey
Source: Reuters