U.S. General Electric (GE) posted a surprise earnings beat in the second quarter, surpassing market expectations thanks to a boom in its aviation business. Both revenue and net income recorded double-digit growth, prompting the market to cheer as the stock price rose more than 6%.
According to GE IR materials on the 25th (local time), GE announced that its earnings per share (EPS) for the second quarter increased by 89% year-over-year to $0.68. This exceeded the market consensus of $0.46. During the same period, revenue also rose 19% year-over-year to $15.9 billion, surpassing the market expectation of $14.76 billion.
Broad demand growth across all sectors including aviation, energy, and healthcare was cited as the key driver behind the strong second-quarter performance. GE reported that orders in the aviation segment surged 37% year-over-year in Q2, while energy and healthcare businesses also showed steady order growth across all divisions.
Lawrence Culp Jr., GE’s Chief Executive Officer (CEO), stated, "Despite unfavorable market conditions such as rising interest rates and economic recession, demand from customers like Boeing and Airbus has not diminished." He added, "Supply chain issues that hit the industry hard last year are gradually being resolved, but we will make greater efforts to keep up with increased production volumes."
GE raised its full-year earnings guidance, expecting to continue strong performance in the second half of the year. The company now forecasts adjusted full-year EPS of $2.30, up from the previous estimate of $2.10. This figure exceeds the average market forecast of $2.06 compiled by Refinitiv.
Financial indicators are also expected to improve. The full-year free cash flow forecast was raised to a range of $4.1 billion to $4.6 billion, up from the prior estimate of $3.6 billion to $4.2 billion.
Following the earnings announcement, CEO Culp said in a conference call, "We plan to complete the spin-off of the aviation and energy businesses next year as originally planned." GE had disclosed last year its intention to split into three independent companies focused on aviation, energy, and healthcare by early next year.
The continuing aviation business will retain the 'GE' name and will hold a 19.9% stake in the healthcare division. CEO Culp will lead the aviation segment and serve as non-executive chairman of the healthcare division.
Responding to the strong Q2 results and optimistic outlook for the second half, GE’s stock price closed at $117.16, up 6.27% from the previous session on the New York Stock Exchange.
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