GE

GE posts higher profit on strong demand for engine parts, services

Credit: REUTERS/VINCENT KESSLER

Jan 23 (Reuters) - General Electric Co GE.N on Tuesday reported a higher fourth-quarter profit as its business that makes aircraft engines benefited from strong demand for spare parts and services, while costs cuts helped narrow losses in its renewable energy unit.

The Boston, Massachusetts-based company said adjusted profit for the quarter through December was $1.77 billion, compared with $1.37 billion reported a year earlier.

GE's aviation business is riding a surge in demand for aftermarket services as a strong rebound in travel and a shortage of new jets prompt airlines to keep their planes in the air for longer periods.

CFM International, GE's joint venture with France's Safran SA SAF.PA, is an engine supplier for Boeing Co's BA.N 737 MAX jetliners and competes with RTX's Pratt & Whitney to power Airbus' AIR.PA 320neo jets.

"The recent Alaska Airlines accident makes the commercial aerospace aftermarket once again the safest portion of the sector into earnings, with demand robust and pricing power firmly intact," J.P. Morgan analyst Seth Seifman wrote in a note last week.

Losses at GE's renewable business narrowed to $347 million from $454 million a year earlier, largely helped by cost cuts.

The renewable business has struggled due to a combination of weak demand and higher costs of raw materials and labor.

GE, which completed the separation of its healthcare unit, has said it would spin off its energy businesses, including renewables, into a separate company at the start of the second quarter.

On a per-share basis, adjusted profit was $1.03 per share, compared with 66 cents a year earlier. Total revenue rose 15% to $19.42 billion.

(Reporting by Abhijith Ganapavaram in Bengaluru; Editing by Anil D'Silva)

((Abhijith.G@thomsonreuters.com | X: https://twitter.com/abhijithg4; +91-9019785574;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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