GE Aerospace

Strong First Quarter Performance: GE Aerospace reported a 12% increase in orders and an 11% revenue growth year-over-year, with profits rising by 38% to $2.1 billion, resulting in an earnings per share (EPS) of $1.49, which was up 60% from the previous year. This solid performance is attributed to strong demand in both Commercial Engines & Services (CES) with a 31% increase in services orders and Defense & Propulsion Technologies (DPT) where profit increased by 16%.

Operational Challenges and Supply Chain Pressures: Despite the robust growth, GE Aerospace faces ongoing supply chain constraints, with spare parts delinquency doubling year-over-year. The company indicated that while demand continues to be strong (with a $170 billion backlog), the conversion of orders to revenue is lagging due to broader supply chain dynamics. This has led to a cautious outlook for departing aircraft numbers, adjusting full-year departure growth to low single digits from the previous mid-single digits.

Tariff Impact and Strategic Mitigation: GE is dealing with a projected $500 million impact from tariffs as they advocate for a return to zero tariffs in the aviation sector. They have identified strategies, including operational actions and possible pricing adjustments, to mitigate the impact of these tariffs on their financials. The company is actively seeking to reduce costs and implement pricing actions while maintaining R&D spending.