GE Aerospace expects $10 billion in operating profit in 2028 thanks to strong demand

Written by Rajesh Kumar Singh and Abhijith Ganappavaram

NEW YORK (Reuters) – Aerospace maker General Electric Co on Thursday forecast its operating profit to rise to about $10 billion in 2028 thanks to strong demand for its products and services, and said it was targeting a pro forma dividend of 30% of net income.

GE Aerospace also reaffirmed its 2024 targets and authorized stock buybacks worth up to $15 billion as part of its plans to return 70% to 75% of cash to shareholders.

“We're really at a point in time where demand is not our challenge,” CEO Larry Culp said at the unit's investor conference. “And we think we have a big runway ahead of us.”

General Electric Aerospace, which makes engines for Boeing and Airbus aircraft, has seen demand for aftermarket services rise, as a strong rebound in travel and a shortage of new planes prompt airlines to keep their planes in the air longer.

More than 70% of the $24 billion annual revenue generated by the unit's commercial engines business comes from services.

The company said its customers want more engines and aircraft so they can meet growth expectations and continued demand. However, meeting demand remains a challenge due to ongoing challenges in the supply chain.

“If we have a backlog in the 2030s, you know we have a lot to do,” Kolb said. “It is a daily challenge.”

GE, once a diversified industrial conglomerate, said in 2021 it would split into three companies focused on aviation, healthcare and energy. General Electric spun off its healthcare business last year, and its energy and aerospace businesses will be separated into independent companies on April 2.

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GE Aerospace has been a cash cow for the Boston-based company, with some analysts estimating its market value at more than $100 billion after the spinoff.

On Thursday, the unit reaffirmed its 2024 outlook of $6.0 billion to $6.5 billion in adjusted operating profit, more than $5 billion in free cash flow and a low double-digit or higher growth rate in adjusted revenue.

In 2025, operating profits are expected to rise to $7.1 billion to $7.5 billion, while adjusted revenue is expected to grow in the low double digits.

GE Aerospace said it will pursue M&A deals with a “disciplined” approach and will prioritize investments in research and development.

General Electric shares rose marginally before the bell on Thursday.

(Reporting by Rajesh Kumar Singh in New York and Abhijith Ganappavaram in Bengaluru; Editing by Shilpi Majumdar, Will Dunham and David Evans)

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