GE Q1 Earnings Could Take Flight on Aviation Demand

The storied conglomerate is expected to report its first profitable first quarter in three years

Logo for General Electric on a building in the Bishop Ranch office park in San Ramon, California.

Smith Collection / Gado / Getty Images

General Electric Co. (GE), once America's most valuable company, will probably report a first-quarter profit for the first time in three years as a boom in air travel demand boosts aviation revenue and restructuring begins to bear fruit.

Key Takeaways

  • GE is expected to post a first-quarter profit for the first time in three years when it reports earnings on Tuesday.
  • GE’s first-quarter aviation revenue is projected to increase 20% from last year.
  • When factoring in the effect of spinning off its healthcare business, total revenue is expected to rise 12% year-over-year.

GE is expected to report first-quarter net income of $145 million, or 13 cents per share, according to estimates compiled by Visible Alpha. The company reported a loss of $1.1 billion, or 99 cents a share, in the same quarter last year. Revenue is expected to come in at $13.3 billion, up almost 12% year-over-year when accounting for January's spinoff of GE's healthcare unit, which contributed $4.4 billion to the company's top line in the first quarter of 2022. The company will report its first-quarter earnings before markets open on Tuesday, April 25.

GE's earnings could show the company's decision in 2021 to split into three separate companies is beginning to bear fruit. GE completed the spinoff of GE HealthCare (GEHC) in January, and expects to separate its energy business (to be named GE Vernova) and aviation business (to be named GE Aerospace) early next year.

Aviation revenue is projected to increase 20% to $6.8 billion, more than 20% higher than the $5.6 billion it reported in the 2022 first quarter. Aviation is GE’s largest division and its most profitable. Aviation margins are expected to be 16.8%, a 60 basis point improvement from a year ago. Its power and renewable energy units operate with profit margins of 3% and -16.9%, respectively.

General Electric Key Metrics
   Q1 FY2023 (estimate)  Q1 FY2022  Q1 FY2021
 Diluted earnings per share ($)  0.13  -0.99  -2.61
 Revenue excluding healthcare($B)  13.3  11.9  12
 Aviation revenue ($B)  6.8  5.6  5

GE stock is up 52.7% on the year, above the 8.1% rise of the benchmark S&P 500 Industrials over the same period. GE's share price briefly crossed $100 late last week for the first time in five years.

Total return of GE stock, S&P 500, and S&P 500 Industrials YTD (Apr. 21, 2023).
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  1. GE. "GE Completes Separation of GE HealthCare."

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