By Rajesh Kumar Singh, Shivansh Tiwary
(Reuters) -GE Aerospace said on Tuesday it was relying on price increases and cost control to mitigate the impact of tariffs on its business as the aircraft engine maker reaffirmed its full-year earnings forecast.
The Ohio-based company, however, said its 2025 forecast did not assume changes in planemakers’ delivery schedules, further tariff escalation or a global economic recession.
President Donald Trump’s trade war has created the biggest uncertainty for the aerospace industry since the COVID pandemic. With little clarity on how consumers will behave in the face of a potentially worsening economy, some of GE’s customers are struggling to accurately forecast their business.
The International Monetary Fund last week warned that rising trade tensions and sweeping shifts in the global trading system would hurt global growth.
GE Aerospace said heightened tariffs would result in additional costs for itself and its suppliers, warning of delays in spare engine deliveries. It expects flight departures, which drive aftermarket services business, would now be lower than its previous estimate.
“The macroeconomic dynamics we are operating in today require us to take a number of strategic actions,” said CEO Larry Culp, who recently met with Trump.
The company expects to mitigate the tariff costs by roughly $500 million by leveraging available trade programs, such as duty drawbacks and driving up productivity. It is also controlling costs and adjusting prices.
Culp said the measures taken by the company along with a commercial services backlog of over $140 billion are expected help it produce an adjusted earnings of $5.10 per share to $5.45 per share this year.
The company has a dominant share in 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.
GE Aerospace’s shares were up about 1% in pre-market trade.
It reported an adjusted profit per share of $1.49 for the quarter through March, topping analysts’ average estimates of $1.27. The company’s adjusted revenue for the first quarter rose 11% to $9 billion.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Anil D’Silva and Chizu Nomiyama )
Brought to you by www.srnnews.com
