(Reuters) – GE Aerospace beat estimates for first-quarter profit on Tuesday and reaffirmed its earnings forecast for 2025, as airlines keep older jets in the air amid a shortage of new aircraft, driving demand for parts and services.
The jet engine maker said its 2025 expectations now assume the impact of announced tariffs.
Ongoing production setbacks at Boeing and Airbus have extended delivery timelines for new aircraft, prompting airlines to rely more heavily on aging fleets that require frequent maintenance to keep up with growing travel demand.
That dynamic is proving beneficial for companies like GE Aerospace, which often sells engines at reduced upfront prices and makes up the difference through long-term, high-margin deals for replacement parts and maintenance services throughout the product’s lifecycle.
The company’s commercial engine division gets more than 70% of its revenue from parts and services.
The company continues to expect 2025 adjusted profit per share in the range of $5.10 to $5.45 and adjusted revenue growth in low double-digit percentages.
However, it also said its full-year forecast did not assume changes in planemakers’ delivery schedules, further tariff escalation or a global economic recession.
“The macroeconomic dynamics we are operating in today require us to take a number of strategic actions, such as controlling costs and leveraging available trade programs,” CEO Larry Culp said.
GE Aerospace maintains a strong foothold in the jet engine market through CFM International, its joint venture with France’s Safran SA.
Despite that dominance, the company has faced persistent supply chain challenges that have weighed on production, leading to a drop in engine deliveries over the past year.
Sweeping tariffs imposed by U.S. President Donald Trump are further pressuring the aerospace supply chain, with suppliers facing increased costs and little clarity on who will ultimately absorb the financial impact.
Last week, Airbus said it was facing challenges with engine deliveries as CFM was “significantly behind the curve.”
The company reported an adjusted profit per share of $1.49 for the quarter through March, compared with analysts’ average estimates of $1.27.
The company’s adjusted revenue for the first quarter ended March 31 rose 11% to $9 billion.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Anil D’Silva)
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