General Electric raised the full-year profit guidance for its aerospace business, driven by an increase in revenue from commercial aircraft engines and services. 

Operating profit this year will reach US$6.2 billion to US$6.6 billion, GE said in a statement on Tuesday (Apr 23), raising its guidance from as much as US$6.5 billion. The company also provided an outlook for adjusted earnings per share, which will come in at US$3.80 to US$4.05.

The report is GE’s first since the April 2 spin off of GE Vernova, its energy business. In the first quarter, GE Aerospace saw operating profit rise 24 per cent to US$1.5 billion, while sales advanced 15 per cent to US$8.1 billion. 

The creation of a standalone GE Aerospace followed the breakup of the storied engineering company. GE is the world’s largest producer of jet engines, powering workhorse aircraft such as Airbus’ A320neo as well as Boeing’s 737 Max and 787 Dreamliner. It also boasts a large and profitable services business, benefiting from strong demand for air travel.

In March, GE Aerospace said that it expects to generate more than US$5 billion of free cash flow this year, and adjusted revenue would grow in the low double digits or more. On Tuesday, GE reiterated those goals.

It has also announced plans to pay a significant dividend for the first time since 2018, when chief executive officer Larry Culp slashed the payout in one of his first moves after taking over.

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Analysts have said GE stands to benefit from additional parts and services work as airlines keep more of their existing fleets in the air due to production difficulties at Boeing.

GE Vernova, which now operates the electric-grid, gas-power and wind-turbine businesses, will report its first standalone quarterly earnings on April 25. 

The company spun off its medical equipment business, GE HealthCare Technologies, in January 2023. BLOOMBERG