GE Aerospace hits turbulence
Investors are worried about supply-chain snarls in the aircraft industry that could slow engine deliveries.
Jet engine maker GE Aerospace is having its worst daily performance in over two years after its quarterly report undershot Wall Street’s sales estimates.
A key concern for investors appears to be the fact that the company projected that 2024 sales of its super fuel-efficient LEAP engine — used in aircraft like Boeing’s 737 Max, among others — would be down 10%, amid a shaky global aerospace-production outlook hampered by issues like Boeing’s recent machinists’ strike and other supply-chain snafus. Total engine deliveries were down 4% during the third quarter.
After the run-up GE’s shares have had, you can’t blame some for thinking this might be the moment to sell. Just yesterday, the stock was up 91% for the year, making it the sixth-best performer in the S&P 500. Even after today’s tumble investors can still book a roughly 75% gain on the year, which isn’t too shabby.
For the record, other high-flying aerospace stocks — such as Howmet Aerospace, up 90% year to date and due to report numbers early next month — also tumbled Tuesday, seemingly taking a cue from GE’s numbers.
