GE Aerospace Maintains Guidance Despite 11% Revenue Growth, Tariff Impact

GE Aerospace, the world's leading manufacturer of jet engines, has managed to maintain its full-year financial guidance despite the uncertainties brought about by the tariffs imposed by the Trump administration. The company's first-quarter adjusted revenue reached $9 billion, marking an 11% year-over-year increase, although it fell slightly short of market expectations. However, the company's non-GAAP earnings per share of $1.49 surpassed the anticipated $1.27.

The company's resilience can be attributed to robust demand in the commercial aviation sector and effective cost-control measures. These factors have helped GE Aerospace mitigate the impact of the tariffs, which are estimated to cost the company $500 million. The company's ability to maintain its financial outlook contrasts sharply with other major airlines, which have expressed concerns about weakening consumer confidence and the potential for a U.S. economic recession due to the trade war. Major airlines, which are key customers for GE Aerospace's jet engine business, have already announced capacity cuts and withdrawn financial forecasts due to the trade policy turmoil.

Investors are also worried that new tariffs could exacerbate supply chain pressures in the aerospace industry, potentially slowing down the delivery of new aircraft from Boeing and Airbus. Following the completion of its energy business spin-off last year, GE Aerospace has become an independent company. Years of restructuring efforts have helped reduce its debt to around $20 billion, and it recently received rating upgrades from Moody's and S&P.

In a statement, Chairman and CEO H. Lawrence Culp Jr. said, "The current macroeconomic environment requires us to take a series of strategic actions, such as controlling costs and leveraging existing trade programs. Based on our current information, these actions, along with our strong first-quarter performance and a backlog of over $140 billion in commercial services orders, enable us to maintain our full-year performance expectations."

GE Aerospace expects adjusted earnings per share for the year to be between $5.10 and $5.45, compared to the market consensus of $5.42. The company also anticipates double-digit revenue growth. These projections account for the announced tariffs but do not assume further escalation of the trade war or a global economic recession. The company's ability to maintain its financial outlook in the face of these challenges underscores its strategic agility and operational efficiency.