GE Earnings Top Estimates as Aviation Gains Buoy Turnaround
(Bloomberg) -- General Electric Co.’s jet-engine division continued to rebound from pandemic-induced lows, helping the conglomerate to post a profit that topped Wall Street expectations in spite of supply chain turmoil.
Adjusted earnings jumped to 57 cents a share in the third quarter, the company said Tuesday. Analysts had expected 43 cents, according to a survey of estimates compiled by Bloomberg. Sales slipped 0.5% to $18.4 billion, while Wall Street anticipated $19.3 billion.
But industrial free cash flow was $1.7 billion, well higher than the roughly $1 billion expected by analysts.
The company also boosted its profit forecast for the year to between $1.80 and $2.10 a share from a previous outlook of as low as $1.20.
“Orders grew, margins expanded, our overall cash performance was significantly better, and Aviation is building momentum and showing continued signs of recovery,” Chief Executive Officer Larry Culp said in a statement.
Revenue in the division that makes and services jet engines climbed 9.7% in the latest quarter to $5.4 billion.
GE in September warned that several challenges could pressure third-quarter results. The Boston-based conglomerate’s Healthcare and Aviation divisions battled obstacles posed by raw material and labor availability, problems that GE said would continue through the rest of the year and weigh on sales and margin growth at the medical-scanner unit.
The company’s renewable energy division, meanwhile, is contending with mounting uncertainty about the fate of a U.S. tax credit for onshore wind turbine installations, holding up investment decisions by project backers.
GE rose 4.7% to $110.27 a share at 9:53 a.m. in New York. The stock had advanced 22% this year through Monday, while the S&P 500 Industrials Index increased 18%.
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