GE Aviation Gains Could Boost Overall Q4 Performance

General Electric Co. (GE), among the largest industrial companies before it started selling off units to stay afloat, will probably say profit rose in the fourth quarter as its core aerospace business benefited from renewed commercial demand.

GE will likely say net income rose 44% to $1.3 billion, or adjusted earnings per share (EPS) of $1.18, according to estimates from Visible Alpha. Revenue probably climbed 5.6% to $21.4 billion, the second-largest increase in several years. GE reports fiscal results before markets open on Jan. 24.

Optimism about GE reflects the strong performance of its most successful units, which were bolstered by increased demand after a pandemic-related slump. Still, lingering supply-chain and logistics issues have weighed on profitability, and unfavorable foreign currency movement could hinder GE's international business.

The latest quarter was the last before GE completed the first of multiple planned spinoffs. In early January, the company's healthcare business began trading separately as GE HealthCare Technologies (GEHC). In 2024, GE will combine its gas and wind turbine division with other energy businesses into a new company called GE Vernova, leaving it with just its aerospace operations.

GE shares have rallied in recent weeks. The stock is down just under 2% compared with a more than 5% drop in the S&P 500 Industrial Sector Index in the last year.

Source: Visible Alpha

The Key Metric: Aviation Revenue

GE's aviation segment designs and builds aircraft engines, mechanical systems, and related components, serving both commercial and military customers. It's tied to the airline industry, which is rebounding COVID-19 doldrums as China reopens to international travel.

GE's aviation business has shown accelerated revenue improvement. Revenue climbed by about a quarter year-over-year in each of the last two periods reported. Analysts expect that aviation revenue climbed almost 24% in the quarter to $7.5 billion.