GE - Earnings call transcript Q4 2024 | General Electric Company

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Operator

Good day, ladies and gentlemen, and welcome to the GE Aerospace Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] My name is Liz, and I will be your conference coordinator today.

If you experience issues with the webcast slides refreshing or there appears to be delays in the slide advancement, please hit F5 on your keyboard to refresh.

As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference, Blaire Shoor, Head of Investor Relations. proceed. Please

Blaire Shoor

Many to I'm Quarter CEO, based joined and them Rahul Welcome XXXX Full Larry on Aerospace's we're today. businesses CFO, Call. statements as of Earnings by Ghai. and our GE best Liz. forward-looking the and Fourth Year Culp; making view Thanks, are the world and our of Chairman see and we

may in SEC filings change elements as our those the described As website changes. world and

speak Rahul, to results and Additionally, consistent corporate on quarters, will company with financial total Larry and a prior and non-GAAP today guidance basis.

Now over to Larry.

H. Culp

Nothing you, morning, April, our We're we the was company, the Blaire. and I Blaire, In Blaire's last of history thank it, with public a purpose, excited. XXXX books flight, and GE's our front at has very top words multiyear more saw culmination everybody to remain good up excited. announcement Investor people under has priority Relations, Those lifting She's the the for that inventing Aerospace. hope to home wing. last and bringing X moment became year nearly in week Head GE million transformation. flight of technology ring passengers stand-alone at nice a safely. been this relative X them everyone. our our promotion. future with than center of

model orders quality, momentum continues. services several in DECK defense serve our year better X,XXX truly and to energizing. teams with relentless safety, the agreements for Commercial elsewhere, commercial lean customers to than Seeing key on from cost delivery and to Asheville signed more and engines. We operating Malaysia launched in proprietary FLIGHT through and DECK, received FLIGHT Wales our We focus that was action our our through order.

an in honored XX order XX helicopters. GEnx received And for Boeing MAX AH-XXE British customer, narrowbodies, Armed Polish Forces Guardian widebodies, were Airways. powered from TXXX we LEAP-XB. Boeing for engines commitment XXX included Apache Airlines American the defense, add jets power to a by XXX In our new we In this the new to

received the HPT At durability with kit. on LEAP designed in twofold parity, we with year, the close field, Combined than today. of wing performance of X by the increase are it's the levels durability well prior to time current the and the more enhancements performing certification CFMXX's that LEAP-XA achieve

fact, we engines in week, to hardware. our new this retrofit the Just customers first shipped with

into going time, It's also technology easier milestones trajectory to advanced future. the same Aerospace we've supporting produce forward. the that significant output our GE propel At will

defense electric And Army. generation, a This team aircraft power completed developing will Our more RISE applications. in open than hybrid our design system with way us collaboration propulsion engine. National with model at to fan of Ridge on CFM megawatt open X wing. integration Boeing, propulsion represents demonstrated the Laboratory, recently we enabling tests meaningful Oak XXX an and advance to in electric an hybrid that fan a engine rated our NASA program We with on successfully the the a announced U.S. increase full-scale

a thanks up what unwavering guide. up double And most delivering for a up and $X.X to GE strong with flow go customers. than is commitment for entire Aerospace our year we important standout financially billion accomplished more and recent free surpassing XXXX we did their billion, it. perhaps delivered revenue cash team this $X.X digits, But been my in profit our we've how our to out morning

EPS nearly Free XXX%. with grew XX% up than and demand above and In double-digit the revenue. more in and fourth were continued. up flow up XX% conversion XX% Profit over Orders revenue services with growth was orders doubled. quarter, equipment for XX% cash robust and both was

orders and orders total while profit units In digits were nearly Defense & the Services At $X.X and doubled double sequentially. quarter our and XX% defense deliveries billion. And Engines profit, full year, up Propulsion progressed. quarter with up to up revenue remained orders XX%, fourth up increased demand were and XX%, XX%, up robust, XX% was Commercial Services, XX%, up for Technologies, fourth revenue

the up and $X.X For profit to billion. increased was XX% full year, revenue X%

XXXX, momentum Looking revenue, we're growth. ahead to deliver as and maintaining of to we aim year cash EPS substantial this another

digits We spending. expect double-digit military solid growth DPT. departures growth growth, increased and CES revenue including low supports of This and in mid-single

the billion. at of $X.XX, combined translate to range XX% will a $X.X with up expect share EPS of $X.X billion We to in profit count, $X.XX lower This, the midpoint. range in to the

to flow, profile. GE our free robust, increasing Aerospace share balance above the billion I franchise exceptional financial of approval. $X $X.X remaining strength planned And to is, given XXX%. with to an billion board generate a billion our our by to $X.X we're repurchases sheet, For and Overall, we expect raise dividend to subject, course, XX%, cash with tremendous conversion believe, of

guide, between taking billion period. we're new expect backlog. to profit our our midpoint free customers' on $X X-year the and nearly focused back, our we keeping flying engine billion flow fleet XXXX, on XXXX this delivering cash and of Stepping $X.X Today, over grow and

of XX% double with sites. is FLIGHT turn XX% supplier head improvement of as growth revenue increased supported first LEAP, Commercial XXXX, inputs XX% unit & including Services' digits, we XX%. the of Defense engine half using chain up tackle to growth team both From second in This DECK and our CES priority up Our constraints to material delivered on. supply the across half meaningful

visit spare was We're with to shop but in shop scope quarter, improved XX%, fourth XX% units than Total encouraged X% But -- defense lower lighter increased by Services with and by flat, X%. we up CES work given engine this internal up expanded the expected recently more was supported growth. revenue our where volume down parts material progress commercial roughly due visit internal constraints. LEAP, year-over-year,

XX% accountability and committed faster chain, a Earlier deliveries. chain will new drive will of full output, base, same us. off teams this priority at in we're last momentum, XXX and a Mohamed demonstrating that improvements over important. their problem Technology a only led help committed eliminating XX%. into FLIGHT supply that sustainable we're supplier, so to volume. targets XXXX, In suppliers resources this be value where further which into And our need Building organization. to year, shared Kaizen this the improve with demand, is throughout shipping With priority meet chain over and supply together increase cross-functional they're shipped Ali. waste, of best to exactly we XX% we're engineering enable as our our one team We'll joint 'XX's half team. to the by and we of when on is deployed our focused solving recent supply engineering Today, operating achieving one across bringing operations, DECK

These close beyond. our importantly, combined and demand actions, on schedules alignment will with XXXX in higher enable inputs material

expanded will approximately XXXX, X,XXX this in by with engines the aircraft in LEAP-powered with aftermarket capacity fleet backlog. XX% growing Finally, support of LEAP now XX,XXX

how. Here's

eliminating we're using and turnaround reducing DECK. time FLIGHT First, waste

example, more fourth support LEAP the year. increasing engine team the of redesigned internal in quarter by to XX% visit on-wing our flow, growth the alone. This shop leave than For output contributed XX% for

which next than billion times. in cost facilities ownership the provide X Second, will technologies, and of $X our our help the we're repair more years. over lower MRO faster We're growing investing internal turnaround

And in center global a key our lead we're network. in network. deploying repairs be technology Ohio, services acceleration Our here our across MRO recently enabler strengthening third, third-party opened will

XXXX premier year, a highest Overall, the further X deliver is faster stronger XXXX. total This experience as of in safety shop engines their with with completed levels Last increases MROs entering we're for quality. XX% LEAP visits. to around them and foundation of and service possible critical volume our

a Dubai, their its flight. Turning CES XX% XX-year and Airlines wing. the to robust, highlighted confirmed narrow-bodies, remains also Airbus CFMXX quarter. commitment maintenance And XXX XX engines At completed powered MAXs by extended for engines powered Demand products Slide and engine contracts, with service EL commercial our our AL with agreement under LEAP-XA X. orders, fourth its the inaugural Fly for for by up long-haul LEAP-XB We've notably, aircraft. XXX XLR in including services Israel

greater providing efficiency. and airlines Our overall flexibility engines route are with operational

their agreement also In widebodies, order announced we're GEXX for GEnx-XBs XXX-Xs the the billion leading with our defense under our to with And for Jordanian orders Boeing China Royal an Boeing power We expanded spares to XX plus through wing. fleet. TXXX Airlines announced for under production up on contract an XX In received of $X.X programs. valued continued engines building the DPT, U.S. Army XXX-X XXXX.

the and The power the platforms. the Sikorsky Boeing HX H-XX, TXXXs AH-XX new Bell will

mission-critical to building an Aero expanding our extensive North We solutions. manufacturer we're addition, Star Avio about today, leading a NorthStar and deliver to signed capabilities couldn't and will agreement programs gears parts. as new as to adding back, a prouder advance to like you? be installed customer and business, providing tomorrow we and future. U.S.-based shafts, our market we're Stepping enhancing to GE complementary our be Aerospace, for In flight I acquire of this in over highly Aerospace base, Rahul, presence complex critical the what

Rahul Ghai

in up services with everyone. for DPT. another closed both with was and significant out with and We growth Thank Larry, Orders good quarter. XX%, XXXX morning, CES XX%, you, strong Revenue were up and demand equipment.

higher was billion, than tax to cash growth Working capital earnings. were Margins a up primarily $X XXX reduced was mix doubled source XX%, EPS more XX% up profit driven billings. volume, up billion, of from $X.X service Profit Free points from from services price. $X.XX and contract by was flow basis XX.X%. a and favorable long-term rate.

outstanding days year-over-year. increased, accounts down were sales days While X receivables

inventory lower Given the prior ongoing quarters. material availability although a rate at increased, challenges, than

a up XXX%. $X.XX was billion basis with dividend. $X.X and growth EPS flow margins with were orders expanding Free Revenue conversion XX% segments. with up to driven rate profit the cash of XX.X%, from points almost XX% For preferred including year, by XX%, lower increased Services over significant XX% up commercial increased XXX in up was growth, services. tax the billion orders XX%. both to XX%, with Profit absence to $X.X

all Taken key the we across year. significant quarter metrics, together, and growth both in delivered the

the with Looking businesses, as quarter, closer demand in were XX% remained accelerated. starting Services orders robust, equipment up at our CES, while

about was $XXX our more Services. with representing Our recent backlog digits, was higher driven up Revenue backlog shop X% double visit wins shop billion by material volume revenue, work revenue, services XX%, pricing XX%, constraints. spare and of on around that that revenue XX% up build grew visit in parts services shop down of price. higher to XX% mix with offset increased Internal and visit due of engine than scopes,

volume parts Spare up XX% the and was representing higher grew XX%. other Equipment price. roughly from revenue,

X%. progress, impacted made down total we X%, down While LEAP, including supply deliveries, chain constraints

the customer mix with our volume was were down deliveries offset Lower LEAP than and year, more in expectations. latest For XX%, by line price.

caught growing we stability. fleet spare In with utilization, deliveries up engine fleet high addition, given airline support on to our

life-of-program LEAP overall Although through in the quarter, ratio spare engine the was elevated in digits. double XXXX ratio remains fourth low

was Overall, basis Margins work $X.X to spare up results up volume, price Margins to billion, basis as shop parts expanded more than increased offset CES growing points XXX and orders $X.X XX.X%. XX% XX% to up XX.X%. XXX Profit profit visit and points mix scope, and strong with delivered revenue XX% full year expanded XX%, billion. investments. inflation

Moving Systems. the to Defense full Demand primarily the Defense here remains for strong year. were X.Xx book-to-bill & by Orders DPT. up with XX%, driven quarter and well, of as

X% than driven PAT X%, was Defense services. and backlog year-over-year Additive by engine now at up more price, investments improved were than more offset grew as in and offset by deliveries quarter-over-quarter. by driven XX and X%, grew $X.X lower other by engines to billion basis PAT more was inflation. billion, X%, XX% was Profit XXX X%. Overall, as year businesses. pricing profit XX% growth a higher Our Systems revenue orders Avio up productivity, Defense up was grew commercial the margin or XX%, of Margins up up year-over-year. revenue finish strong Technologies, in with basis units full down with & segment were Propulsion partially is expansion for volume & than were lower points. billion next-gen offset up points. and $XX partially XX% Revenue $X.X by

by ensure corporate. stand-alone Corporate a to in volume Aerospace the $XXX in about substantial GE $XXX million million made higher movement progress the year. our as of needs for $XXX approximately operations including eliminations, We to increased A reflect million internal Elimination was PAT. costs, from company.

to interest million, down higher and was over driven lower roughly cost X/X functional by $XXX expenses income. eliminations, Excluding

compound sheet, of and returned We remaining stake and returns of this And balance billion shareholder year, Aerospace in for GE more Healthcare shareholders, XX% positioned we to GE flow on free of dividend including of income. buyback a also our exited is well $X of net Based to the share our fully term. quarter. XXX% than around for our the performance strength cash long

our to Starting CES. with XXXX Switching guide.

for segment. mid-teens revenue growth We the expect

services from expecting are low low of double double digits We prior up digits. up now mid-teens, view to our to be

we midpoint, to revenue scope, the single-digit from the to is pushed visit At shop visit improved expect pricing work higher and up right which internal volume XXXX. from be high shop growth,

expect to pricing. double-digit growth parts traffic mid-single-digit growth low continue We air revenue and from spare

We engine negative pricing, XX% up engine and volume growth expect in than equipment XX% high from LEAP to offsetting up teens mix. deliveries more including

We of expect will second the $X.X be at year. to R&D higher profit services investments of growth. half the $X.X of impact in increased the reflecting billion from XX CES, This by and partially deliveries billion offset the benefit

$X.X defense be internal XX% the at of units by to In $X.X billion Corporate mid- first $XXX In $X.X billion in We profit we Eliminations costs the grow XXXX. volume also DPT, high are less with lower expect partially the range $X.X billion. profit growth midpoint revenue than the increased defense total, growth. or Higher single-digit about the to company are revenue in expected spare half. over up in to $X expected low PAT we ratio. expect range to double-digit We've deliveries for and are investments million billion. offset billion, year as self-funded to expect of of a engine grows. another

Turning to Slide XX.

through repurchases, XXXX be tax which the rate, in and $X.XX We to is the from range the balance expected EPS billion below executed XXXX. improvement improve expected billion the The to additional share $X.XX, XX%, the at to in from midpoint. expect benefit XX% will an including higher come XX% in roughly a of up the profit. $X reduction be and $X will About of to in

capital year-over-year to higher of CapEx solidly AD&A with will we tax of $X.X combined XXX%. We expect Overall, growth and flow, year earnings. free by billion primarily higher Contributions be is to more and that from another expect $X.X cash cash working generate offset conversion year-over-year billion from payments. above than

poised year is Aerospace of GE together, for ahead. Taken another growth

With it to that, I'll you. turn Larry, back

H. Culp

along Aerospace. Perfect. to first Thank you. cash billion strong was advantages. for a underpinned as over us was significantly with grew earnings That and shareholders. by year We revenue, clearly XXXX returning our GE competitive performance $X

defense Our sectors. platforms preferred are wide-body by narrow-body, customers the and across

times. across efficiency, and levels And is wing Our reliability, and do including of service provide that delivery, of At customer everything and industry's technologies highest core the most extensive services industry-leading safety, XX,XXX engines. quality, we operational on installed we're unrivaled the base in flight greater time the faster turnaround support order. focused on with

innovations shareholders. We flight and to flow believe our free is for growth more breakthrough shareholders. our well way and connects our and value results, enables which our positioned substantial customers FLIGHT We're cash XXX% defense paved of to create forward our for of the another exceptional deploy and path clear. commercial in year over our sustainable deliver to us to DECK, both and a Our deliver strategy

our I'd the prepared Southern take fires for to a like Before we in impacted express those moment all of by support to our California. wrap remarks,

planes engines Seeing we of connection a our Q&A? to many and soon. deep can contained our hope powering CFX, CFMXX commitment that battling to to those shall we Blaire, fires, TXXX be fires safety go and the feel

Blaire Shoor

[Operator the Instructions] Liz, line? please open you can

Operator

Instructions] [Operator

Bank. Deutsche from first Scott comes with Deuschle Our question

Scott Deuschle

to efficiency in could that what profit be LEAP Rahul, initiatives. some achieves flatlining and think you to you when you profit benefit can LEAP guide goes Or pricing right and with is these from gains OE reasonable OE the refresh time center own then foresee breakeven, on XXXX from operational recent its it trajectory LEAP assuming of as the us a OE on And is there? do respect profitability?

Rahul Ghai

Yes, absolutely, Scott.

can start So LEAP. your and improvements let can on add. in year for comment I me start Larry LEAP a Larry been here the with good really we've that can Obviously, question driven answering it's that overall. operational

a profitable XXXX. milestone was XXXX. in program with And the Scott, services OE for a first, LEAP following in LEAP. XXXX, year breakeven So it becomes year later in became

expectation to our So expectation that today. be our continues prior that was

look volume, more going to expectations the are as how performed than visits we as profitability be better from some year, external LEAP spare And of pricing, lower better those we initial during shop the for tended parts than expenses in warranty program expected. the at higher it initially fixes had and

parts in So that's that our expectation. spare program shop higher margins external is our volume. getting for And the key from milestone and for increase profitability XXXX better and the are visits

the despite So performance going and -- OE more we're engines ship. of improves number to that

services to in just have in and we comment profitability. visits to and non-GE that are will volume, were And that basis, shop we the sold the north external just XX%, to XXXX. visits visits And of shop shop shop the XX% XXXX, XX% help a of visits on external visits, on front sold, increase about shop expect that future

program as profitable program the listen, services going right base, think the the trajectory. just overall, the even becomes growth next to So I OE power has program. the of trajectory kind installed year, year, on breaks this program is the And the it's with that

So be little by we expected in levels LEAP performing CFM to a maybe better. CFMXX is bit XXXX, of kind

of program and that's is of decade, but towards that trajectory this in company. part add it's the Anything here? you the -- CFM to on LEAP end profit delivering sometime are late want for that same So amount the the the

H. Culp

on installed that doing the is -- with that opportunity Clearly, installed coupled covered of leap Rahul what LEAP. really that, about the with be up, excuse function us me, at end supply progress in XA think XX% already this that base the the I expect come at made more we're year, to of year about growth, the engine sets XX% new think, that, as the So would base, talked this market. units that the us marketplace. is in you've ramps with we've aftermarket really HPT to we that the up sets We was we I with of right? what just course, managing more landscape the currently the performing after to to supply base Scott, a think the with morning much the well base there. talking strongly we respect about, particularly And of up, even know

I think cycles, basis points we increased XXXX. our of XXX share what, in

us. of good of lot we for It's in days a So many early things LEAP. in front have respects still

Operator

with question Research. comes from Walton Myles Our Wolfe next

Myles Walton

you well the 'XX, you profit I'm growth million billion of At $X away not earlier, the new deserved. 'XX for curious, is what Blaire, mentioned, 'XX, 'XX? Congrats, to profit XXXX. that base looking of start growth. blew didn't of as the translate operating The were 'XX versus about base look But into as sequential number. that guidance in you of you believing climb the XXXX fact at just in $XXX

Rahul Ghai

Myles, get in of from by if you you billion XXXX. that we step look billion, billion, So profit And ended the about to it, we call XXXX. $X.X numbers were billion to you alluded listen, and $X.X March the of XXXX, at billion, end of $X.X about to, of expecting back, kind $X.X was sitting up, $X.X that where

to his today, Larry add we prepared sit of as X-year we're profit said Now in $X.X here the about billion as in period. going remarks,

So X/X months that's what thought ago. just better than X we about

well. is business extremely the performing So

end. million it, $XXX and of about think midpoint the at year-over-year you call as XXXX billion profit, million high $XXX Now the at $X

the volume. eliminations we up million $XXX corporate PAT spoke from So higher -- from elimination about of about first,

up up expect about from of million growth So we the profit CES to biggest to expect But midpoint the that at that the of services that that's And driver is CES $XXX at revenue billion we're we the one up midpoint. $X the aside, year-over-year the to be put drop-through getting profit within about be thing. guide.

the LEAP XX that to of And XX-XX as CES services offsetting R&D despite revenue OE, within the productivity with impact And and the between shipments. is step-up we to will margins be expect impact. pricing, services from LEAP mix services a the offset to be about the split greater share other getting in flat all things, be increase that

'XX. a million in to as number XXXX We is down engine shipping. we expect are And of well hundred gradually we be spare couple of XX ratio here the headwind ramp engines expected as to in about dollars of that come

so So and guide. expect with CES $X.X call we in growth close mid- That's XX% expanding backlog that's at to the revenue in into high the about of basis XXXX, given midpoint the about the DPT, single-digit listen, to landscape in and translate XX to it going points growth backlog, billion, margins profit growth.

to guidance. listen, $X it at end and year. be a high just to I little the be need better end we of services that get the overall, the bit billion a to good should you And referenced, high of So think the perform

Operator

comes America. question next Ron Our Epstein with from of Bank

Ronald Epstein

we Question that on about is for opportunities in other engine When flight mean, XXXX XX. for you I Are that, XXXX? the test. think back there beyond the

H. Culp

say at friends on get Ron, point would launched. our in fully I time, plane helping focused that in this we're this Seattle

think it's We So as over testing time. to be we're program engines mentioned, wing. see, Boeing. resume. under We to to to obviously Delighted ship be flight great a started wide-body going to you proud

clearly, in about to backlog. X,XXX strong. continues we've We've engine nearly quite got but engines work do, So to and the now to that aircraft customer be feedback got relative that

cycles. like use additional to I'd probably testing, with the that delays, going end to think our engine of And history. made We're good up that time approaching respect with to tested X,XXX most we've being in just the

second nozzle second we've and we're the CMC engine a designs. fact, HPT iteration got In test critical already of underway. our let in blades, harsh environments dust And hot on alone

that So at moment, focused on EIS. but ultimately, and the about that excited we're backlog

Operator

question with Sheila next from Our Kahyaoglu comes Jefferies.

Sheila Kahyaoglu

in the corner. the volume internal margins XX%. visit stellar was quite still just slower on even at And CES on shop services given performance expected back the turned focus to QX, wanted I Maybe Blaire. Congrats, hasn't given growth,

how a about that little talk could to year you from month different just So outlook the the and as talked if low-to-mid spares bit, talk will internal the just when teens. just about ago of the services, the Can maybe throughout here contributing raised about well. we about XXXX -- to pieces I that? moving and X mix versus you think this cadence are the guidance know you you as parts And engines think the about you

Rahul Ghai

right. All

let the CES if Sheila, sure but we make obviously, spare had visit Sheila, Listen, than Favorable you good answer So had hit come wasn't question. a services and quarter, I mentioned, exactly anything, volume me we shop to as be, needed and where don't start what back expected. mix. we the better parts did better.

as the of we them of are have challenges again, are supporting are parts that we And kind and those managed that make encountering, supply around to airline we our chain quarter customers. fungible, move sure kind we every

bit between of So little volume internal and there's always shop a parts visits. external spare tension

So spare the the in skewed quarter. parts mix toward the

mix as then favorable was engine well. And

in As on we up the had said we spare quarters. first remarks, engines caught the not our you that prepared in X delivered

engine through ratio caught -- in is expect spare in we But double is fourth we digits. LEAP here for quarter. up overall, 'XX the low So

we're down, come gradually a steep not will expecting it So here. but off drop

summer remain And we about we to gets then the of external that think be digits. year, implemented here, up where they're pricing be you within the mid-single to parts all low 'XX as So to changes strong digits. double parts CES given of Sheila, spare expect thinking the spare kind up do kind the we departures expect market about that last is,

come increasing, visit you turn wide-body for high like are be going shop be and then that visit, the shop the shop And LEAP. versus mid-teens. for revenue expecting are to scopes earlier visit volume and growth programs work GEXX visits coming first to visit that single-digit NXs up going a the combine shop quick second the with shop revenue, from the And that's we

and are So increases increasing then modest price to portfolio. service that work scopes baked

landscape that kind profit to going response that's the to growth, is and revenue of earlier. drive So of Myles' CES the the question in then

Sheila, about parts Now back CES But the we're in come of that our a, XX% entering are towards end we out are strong driver backlog. the the going especially, and to more the the shipments XX, for primary of just year revenue -- for within that of year. spare is, the just here, with gate

part had we XQ to CMR the have -- quarter of spare expecting had then over year. a expect in to the strong shop here of as well. We're $XXX grow last to we'll that sales, we repeat. our So And we start with million visits not in

profit be are So strongly should answers with for revenue question, we full of in kind CES the and the expecting quarter we'll start Sheila. on for what year. for the line year that Hopefully,

Operator

next the line of comes question Our with Bernstein. Harned from Doug

Douglas Harned

these is But issues? year. coming constraint? can versus this then And just mid-teens can about low the you Because words, I because go that's year, chain or the a growth In follow talk where commercial wide-body double-digit you resolve little talk more a on about supply want from? narrow-body. to when services talking before better next to were up other could that's about you higher you you little than if

H. Culp

just imagine, We've got execute strengthening in more an demand right? respects, level higher? as work to is Could supply backlog, there, chain But demand We've Rahul Doug, that got on unhelpful do to a through. see. there the that pent-up with walked everybody it's is, broad-based go we would delinquent. of you the we many what

do combined could outlined. our we wouldn't to we if I in continue know in to deliver sequential the So to shops, work got but progress with improvements what say no, own inputs, deliver we're we've the I making environment, the granted. a we're for we challenge the about it But take But demand is again, operational won't focused. for us execution. want given That's believe. given where it all in backlog, really don't We to it be just XXXX,

Operator

Research. Robert Our Stallard with next Vertical question comes from

Robert Stallard

LEAP. question on a the Just

down. in to growth the XX% spares year expect expecting that ratio and you XX% this You're said to Rahul that come

So are in expecting the you the between Airbus looking how engines, split XXXX? remnant and to go at of Boeing those

H. Culp

production this -- we both them those to we that you are up have aligned Well, year. contact with detail customers, for into as publicly. I they think frequent of support get all imagine, in the I are we of particularly our don't think they as of well But XXXX, vis-a-vis level would X intentions step

Operator

Our with next question comes from JPMorgan. Seifman Seth

Seth Seifman

in to ask the of kind spares terms you departures price. -- about wanted growth, of talked I and about

that One degree I of to which maintenance affects curious time, third-party spares over the of and that amount trajectory us and done the externally? the doing growth also kind will other to still of provisioning shops front how of the think the you're that things plays be in of that's that's over do LEAP am more degree about CapEx time which to and internally you maybe work the LEAP is versus happened, of into kind

Rahul Ghai

start coming jump me can out internal. here. Obviously, have as of of So in the shop visits Seth, most the gate Larry been and here, let we're

or you give step As shop, is XX% GE. about take were The we or up. network within to is beginning performed Safran that and external it said,

X that to spoke the external win one the They're CASA about beginning We third-party with partners. MRO of we last have partner get volume. We have quarter.

and are been the up, up sequentially up. as gone So visits stepping year stepping has they've those

think about said the on we XX-ish shop So and grow to And visits that And third-party MRO earlier, partners. will about, XXXX, to XX% I which are of that be beyond. then expect about gradually we as get our going visits we our -- external. it, be call as are to we shop as have -- into up XXXX sold performed then by percent of

So that's are externally. And spare grow the sales will more as trajectory spare will we parts within performed on. shop visits obviously, are part that, grow,

because program that the on get dynamic. the will So better of margins

we on on our own mean our side, just are contract, for Larry years contracts. of on margins good internal services given durability of service stable. internal I that service profitability couple -- all improvements performing here our are very the that had service on even listen, our we've mentioned, just overall, results the But years, a work

we well. good that feel about as So

Operator

-- Strauss question next comes Our morning, Barclays. David. with Thank from good David

David Strauss

the touch go those forecast that pieces on could to kind you wanted tailwind. flow slight working XXXX. capital, maybe you're neutral-ish out are overall Just LTSA, Rahul, between working moving of breaks maybe free like cash, just if cash inventory, a How capital? assuming looks -- within for thinking you it into AD&A,

Rahul Ghai

Yes.

And had contributor. be AD&A capital, is XXXX. buildup inventory, should our to same So be be billion David, not add working cash level. inventory I in expecting should of positive mean Working than $X.X 'XX the less to within in inventory growth we about added most driven capital and of obviously earnings. in going the the what We're XXXX. combined in by a we

and deliveries, objective increase do built we've primary it liquidated. getting that our But the we will that what our is -- with that improvement up in expect deliveries the to inventory of again, takes. will start some do Now we

the increase of The favorable shop is assets, as very was other that in visits. side 'XX 'XX the be just -- contract not in which will in favorable the given contributor flip a

a as still a but So not of positive. much positive

capital. So of within that's kind working the

fourth overall, about beginning we the back, AD&A, consistent marginally in the at a was the outflow ended maybe of Now little of be at year, we the towards thought at level, $XXX which skewed higher. a overall million to expect quarter, with what but the bit outflow 'XX, more same AD&A

kind that's of So expectation AD&A. on

cash tax offset we step-up then by a And expecting and the year will higher working and capital payments next contribution AD&A in CapEx. be from positive

solidly is conversion in we little still had XXX%, maybe So lower than a XXXX. bit what above

Operator

Citi. Our Gursky with from next Jason question comes

Jason Gursky

company? on deserved. it's on where in across spend to the of minutes it going to of seeing well getting time? we're you that And you external -- company role, labor the to get Blaire, few And pandemic? and to on elevated do much the the just for dependent do take control, you productivity And wondering prior what And back your much you that is you pre-pandemic how think just are Larry need levels? how on I suppliers is productivity to if the you actually what relative congratulations was a think

H. Culp

XXXX, Jason, everything saw the I through operations. a come visiting we that our on think number of we financials, I back saw look everything as that

evidence ample to the center productivity, really FLIGHT out and the tools just drain of us Just that of go work. is DECK we all and principles of labor their in, the That, do daily waste heart at productivity. me, the operators put the helping are

that inputs that with material eyes see referenced hasn't prepared delivery for predictability, translated this us higher will remarks, sequential, way repair half, productivity. those the the that don't labor those very on. The defensive. XX%, we that Unfortunately, in or our labor shops, the enable such actually second any our our north the reliability that more linear fully And do higher XX% want I first coupled through we're flow critical now to to the with that we through we'll have from for predictable, suppliers inputs with progress half performance in think up of you making more on-time better of a factories, into I own work better the reason sound touched either productivity

on to inbound of labor certainly as to labor, our fully 'XX able much, will, lack hard in how if comes result a be we productivity think we and those, from sit as better deliver of challenges delivery expecting It's But there. the I side. quantify you work here to productivity

Operator

comes Parsons next Our from with question UBS. Gavin

Gavin Parsons

love a go getting kind further of it's just I'd little like supply into chain It sounds to bit. better.

-- Blade XA in internal visits were down shop the the visits got You've fourth still but were certified, quarter. shop

through into points if where the that's maybe bottlenecks a step point linear unlock. some are pain at if So and on improvement function that's you still just go could 'XX or an a or if the

H. Culp

intensely think Well, has or with. that by remains suppliers it of we're don't as new working that in way we so The regard. I critical XX have challenge news with much

mentioned I think the need. our supply that to got we people over unlocking we've and working of that own we today in output the base, identify well thus constraints, again XXX embedded eliminate yet

a fits was we progress the significant. think it game 'XX, inches, right? But and made at hindsight as in of we that you came look if will. in starts, I is It

function improvement sitting XXXX. I necessarily think step There's the there. to out no case that will in be continue

that, we durability with that fundamental how XXX. working the be And working it their they on have the kit to bottlenecks to we signals On those in we're they're critical. that will really through Airbus is clear same through the aligned working broadly both demand the help. our is the speaking, And as particularly entirety well we goes ramp, with LEAP-XA the as And MAX. and whatever certainly, XXX capacity will the we're their of march being and But know constraints, what's they Airbus. hard, very make own so me, on operations. toward blade to really may And deployed supply support that like Boeing base HPT sure year properly more are that this

So for into won't a linear, prepared but confidence I into be do. ramp It we're lot coming the far XXXX. to than XXXX coming we think we tremendous were that have better

work with into we I'll newmake. the do helps parts aftermarket. supply us that is ramp thing same often our final the we airframers feed focused base wholly and the And talk about the that the on it's The same often but say support the suppliers

XXXX. caution LEAP anyone again I to in to XX% with over-indexing on just that, So -- excess say, that, in we going base in demands are same XX% supply also the on aftermarket because about need the partners. over newmake that of increase those would to support The to be

Rahul Ghai

saw sequential And output just Gavin, in what you Larry improvement about to out add we're as of engine to just here and coming as gate, in our said, the XQ. think just XXXX the we

continuously sequential improvement We as through expect year. that of the we go kind

second year-over-year quarter basis gate into out out quarters coming last XQ. that's translates had challenging a but what year -- get the because some we and bit more well a into in we as of third where the we And growth started on because little that

programs. little the given in making to support for here internal a plus investments earlier, in business to we to but have think going that the the I first that just how XQ, start to Sheila's quarter strong how for to is the about some translates So to DPT, a was what well. and start I applies little said DPT add going of slower DPT DPT our same in as to softer question are CES perform, is overall business pretty new the

step look So be down to flat revenue first for company, the maybe and full year if expecting back to line year profit expect what at but expand quarter margin full up quarter bit our we to a the the that strong what the to should for basis and with go company overall, you did are overall be sequentially we from be little well. for quarter year-over-year versus XQ growth fourth as in XQ, in slightly a on to the we flat we could as down, but

Blaire Shoor

Liz, question. we one have for time last

Operator

from This Robert Melius Research. question Spingarn with comes

Robert Spingarn

strategic can a maybe up with I Larry, question. finish high-level

aircraft Someone them a programs. offering provide in bundle argue to and advantage Pratt's when for future packages technology with ability that bidding with competitive work Collins propulsion avionics RTX's structures could on

the This desire since morning. organic this any in to to shape. is is X means? deployment the is by years, you're lot updated next more evidenced through or of generate over business going there expand particularly propulsion And great cash inorganic a plans sheet your balance Your cash beyond

H. Culp

shareholder announcement, respect only ample returns. and we I just we reiterate, how we toward we strong will to our certainly cash think going allocation our capital year to by have we think framework But now shared not have stand resources. going again, 'XX, almost that forward, flows ago but that bias mean we will again role we're in a with a in But publicly our to situations, and cash deploy Doesn't reserves appreciate commented I that on and tuck-ins what this we know do will small will of I've think exclude this to with Star elsewhere much M&A. hold company adjacencies. morning. But at I'll I question. this and North as understand you ever we'll the be here saw specific the or

Blaire Shoor

comments? final any Larry,

H. Culp

today Blaire, standout the up everybody heard results XXXX. in delivered I say how there in no And on certainly your historic I and demand work your the and call meet be We excited interest we the we deliver the industry to would to just what fourth team appreciate quarter to around as all GE are ahead, Aerospace. finish clearly, wrap about exception. our believe in the time was world for hope we the year customers.

Operator

you This concludes for Thank you, participating. and today's conference. ladies gentlemen. Thank

You may now disconnect.

General Electric (GE) 23 Jan 252024 Q4 Earnings call transcript