General Electric shares jump after group targets revenue surge at aviation unit

By Scott Kanowsky 

investing.com -- General Electric Company (NYSE:GE) shares surged on Thursday, touching their highest mark since 2018, after the U.S. conglomerate said it expects revenue at its key aviation unit to expand by the low-double digits to mid-teens through 2025.

As part of its latest investor conference, the company also reiterated that the GE Aerospace division is projected to report revenue growth in the mid- to high-teens in 2023, along with $5.3 billion to $5.7 billion in operating profit and an improvement in free cash flow.

A recovery in air travel demand following the lifting of most pandemic-era restrictions has helped boost performance at the business, which supplies and services engines for jet makers like Boeing (NYSE:BA) and Airbus.

"GE Aerospace is defining flight for today, tomorrow, and the future with our differentiated technology and extensive service capabilities," said GE chief executive officer H. Lawrence Culp, Jr. in a statement.

"Looking ahead, we expect that over the long term this business will deliver mid- to high-single-digit organic revenue growth and continued margin expansion with free cash flow in line with net income."

Analysts at Wolfe Research called the targets for GE Aerospace through 2025 "pretty impressive," adding that medium-term estimates may be upgraded after the investor event, thanks to the bullish outlook.

Meanwhile, Culp said GE is "well-positioned" to have a strong 2023, with adjusted earnings per share seen at between $1.60 to $2.00 and revenue growth percentage in the high-single digits.

However, GE Vernova, the group's portfolio of energy firms that includes a troubled renewables business, is anticipated to post an operating loss of $200 million and $600 million in the current financial year.