(wartamoro.com) -GE Aerospace CEO Larry Culp said on Thursday that the company's efforts to fix supply constraints are showing results and driving up jet engine deliveries, boosting its profit outlook for the year.
Culp said the company is also making progress in mitigating tariff costs, and expects global aircraft departures, which drive its services business, to rise by low-single-digit percent this year despite lingering trade-induced economic uncertainty.
GE now expects annual adjusted profit per share in the range of $5.60 to $5.80, compared with its prior expectations of $5.10 to $5.45. It also raised its 2028 forecast for operating profit from about $10 billion to about $11.5 billion.
The company reported a 45% jump in total engine deliveries in the second quarter from a year ago. Deliveries of LEAP engines, which power narrowbody jets of Airbus and Boeing, were up 38% from a year ago.
"We are chasing a moving target. But I think those numbers ... suggest we're making real progress," Culp told wartamoro.coman interview.
Shares of the jet-engine maker were up 1% in premarket trading.
GE Aerospace dominates the engine market for narrowbody jets and enjoys a strong position in widebodies. More than 70% of its commercial engine revenue comes from parts and services.
Limited engine supplies have delayed production of newer planes, forcing airlines to keep flying older, less fuel-efficient jets and spend billions on aircraft maintenance. Airbus has cited such a supply bottleneck at CFM International, a joint venture between GE and France's Safran SA.
Culp said the company's suppliers delivered 10% more parts and material in the second quarter from a quarter ago. Moreover, suppliers are now shipping over 90% of the committed volume, he added.
But with a booming demand for its engines, Culp said the company needed to do more in the second half of the year.
"You're not going to hear me declare victory," he said. "So we're going to continue to push."
TARIFFS
U.S. President Donald Trump's trade war has driven up costs for the company and its suppliers. GE Aerospace expects the tariffs to cost it about $500 million this year.
The company is leaning on cost controls and price increases to protect its earnings. While airlines have been reluctant to absorb the tariff costs, Culp said the company has little choice but to pass them along to its customers.
"We can't offset all of the tariff pressure ourselves," he said. "So we're going to look for a little relief hand in hand with customers. And those conversations are active and underway."
He again urged the White House to restore a tariff-free regime for the aerospace industry under the 1979 Civil Aircraft Agreement, crediting the industry's decades-old duty-free status for creating a $75 billion annual trade surplus.
Culp expressed hope that policymakers would follow the example of the recently announced UK-U.S. trade deal, which would fully remove tariffs on aircraft and related parts traded between the two countries.
GE's adjusted profit for the second quarter came in at $1.66 a share compared with the analysts' average estimate of $1.43, according to data compiled by LSEG.
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