General Electric (GE) 23 Jul 242024 Q2 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the GE Aerospace Second Quarter 2024 Earnings Conference Call. My name is Liz, and I will be your conference coordinator today. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference, Blair Shore from the GE Aerospace Investor Relations. Please proceed.

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

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

to over Now Larry.

franchise everyone, largest GE near Aerospace's And the growing call earnings Blair, Aerospace first fleet the Air an an International and industry's choice. hello, rotorcraft engine as thanks. company. with Farrow commercial propulsion from and London independent and provider is exceptional GE the Show is for of combat

to Our services customers. commercial business XX,XXX revenues and aftermarket XX% about supports close of our our and installed our base representing resilient that's defense of recurring, engine us keeps

to a has words, the responsibility. people safely. never flight, lift them clearer: is and X Those last purpose safely, of serious been up home future bring home them invent bring Our

with XXX,XXX the At under center are at any that is point, of are wing, there the everything people we our safety quality which do. technology why and sky in

world around lean understand operating is priority in our the Paramount our and model. teams Our proprietary top Flight Deck, it

opportunities by and GEXX are industry customer, our to powered including Airlines Airlines together have Farnborough, a days, few we're at for conversations sustainable We've GS both new a National GEnx engines Airways, challenges more new historic solutions. X demand and meet committing Boeing Japan Turkish engines. wide-body is had commitments to also British from for productive engines. the Airlines to We're XXXs having honored the on focused and the facing Here as work and the energizing we and build

program time XX% compared rate offers CFX win XX% engine of on on life GEnx to the lower and XX burn the in resulting a platform. wing, best-in-class a The fuel

XLR marks last power XLR into expected XXX aircraft the entry certified by this family with In the of the service European EASA, Agency, or just pleased by narrowbodies, member Aviation week. later Safety AXXXneo was the XXX we're powered Airbus engines The lead Union these fifth year.

choice, program. jets. pioneering this Embraer to Core, level about moving regional partnership engine and of of open to regionals, sole-source Keeping wing narrow-body year. and the of We've growth updates on the the the shared for decade. our systems will engine at this show, agreement end these module GE In our mature levels through this the engine continued as shrink new extended fuel the later Aerospace the CFM tests. CFXX time towards RISE efficiency week RISE This we've of LEAP, the the electric supports more eye and fan, XX% is on the offers deliver EXXX CFMXX alternative for component-level than evaluations continued mature agreement and suite fuels. future, deliveries of a hybrid number Compact of including technologies, an technologies, better

and with For with the of test. our the demonstrated design of we've XXX open fan wind partner, tunnel hours acoustic aerodynamic more example, performance than Safran,

of Energy Department to in expand deliver industry change reduce the design. or expectations exceed will fan help advance fan fuel meet most a and Additionally, further durability to customer the open U.S. step technology efficiency. we've open a design engine capabilities, agreement new is announced promising computing the to with which for The

our on Turning to performance. some of second the quarter key takeaways

while operating by cash double-digit and was profit Our flow, outlook. revenue lower free orders, across team growth delivered impacted

visits and more our growth driven growth tomorrow the Engines was our profit, to With FLIGHT and XX% positive, internal was Profit services actions shop pricing. overall for remain than DECK, we're traffic trends which or Commercial today, In well priorities and accelerate Services, up future. deliver in by CES, to supporting positioned growth improved and on XX%. air

strong very and delivered increase. we year-over-year. global DPT, or Technologies profit a Added Technologies, in growth to up Overall, and Defense drove profit Propulsion more go thanks out And solid Aerospace Systems improvement entire than GE Services the very Propulsion team. & XX% growth, and half. & first my this in Defense In quarter

day our focused we're on Day and delivering of out, more and simply airline in, want who airframer our and both for products services. need customers

as While FLIGHT we've head constraints. clear use disappointing the output engine to partnership ongoing DECK this made we're It's supply we the in in quarter, facing progress services our solve our of accelerating a that with sequentially. on, was new suppliers chain work challenge

supply shortages engines shared we supply new XX% our quarter, to common both This input constrained sites. of suppliers the material with material that XX remains mine impacting focus is tied denominator services and Last today. growth across across

and more supply We our engineering the constraints. identify work use deployed hand-in-hand resources our resolve base supply suppliers FLIGHT than XXX DECK to into of with chain and to to have

longer than We've more more of more is no there and significant made in areas improvements but do constraining the than collaboration, their grateful We're material is second and deliveries. X/X many for currently in these doubled sequentially still to sites, flow half.

the we've faster but still meet sites making enough our our And not focus output. subset constraining priority to a can progress. we partner with demand. suppliers personally and I've to our confident these on several We're remaining sharpened of I'm of visited they're drive sites, progress, some

on the month, Kaizen focused priority partnered addressing suppliers key with this of earlier constraint. example, in For a a joint we one

needs teams average. improve jointly chain half deliveries. resulted to supply actions significantly, so a leverage growth in material our double-digit with engineering These throughput flight and here versus deck second July to identify for plans far second in input quarter tying Our action the

So a promising start.

but at plans second half yet achieve to our state, continuous action improvement these ramp. not on desired we're and Overall, we're joint a counting

reduce own April, seen quality, stability We're engine aggressively and we've overall higher that output, order. and in So relative variability. in deploying delivery far DECK and operations also safety, FLIGHT improve July, to to in cost our

decrease with increase this in shop turnaround nowhere time been of And visits to solid made for roughly shop shop support improved for XX X% days days a our LEAP XXX visible airline to our LEAP has We've XXXX, in improvement than internal internal in progress XX% customers. continued compared to We've output visit sequentially. fielded our visits more sequentially. example, LEAP.

both organically and expected by doubles shop investing fleet growth to in the XXXX. LEAP the also inorganically meet to We're visits

we to announced and in technologies key new visit over This a time invest $X week, unlocking As our X around [indiscernible] we're introduce capacity next LEAP cell, output. recent years, test further in MRO billion turnaround world reduce last acquire includes increase a agreement planning shop facilities dedicated our and costs. the the to to to

and and shop of visits engine satisfied. by output delivered Overall, on weighed In our growth. I the by in to means no I'm quarter, flow second, revenue, delivery in that continue customers. cash am grow support significant significantly our free but the progress, confident Aerospace we'll product encouraged while GE increase

Demand XX%. up the engine with up than price combined remained offset more Revenue with was growth with shipments. strong both Services growth lower orders in segments.

was growth, profit year-over-year from billion, up mix. operating Our favorable price $X.X XX% and services

with Operating rate. margins was expanded driven and the flow ago. significantly constraints year-over-year. a was driven year-over-year confidence nearly both which our significantly raise and mentioned XXX earnings lower inventory XXX%, free billion, supply free from growth cash I Both combined nearly conversion basis profit $X.XX, Adjusted a was were more Free CES with XX%, This improvement profit up operating full the XX.X%. flow up giving DPT. moment points $X.X up through and to cash by higher by year guidance. EPS earnings, operating margin at and flow more tax offset and Halfway well year, chain of than increased cash to positioned up than us product we're XX% cash

combined growth, shareholders, returning free This approximately will to flow cash continued profit of and available $XX compound billion with cash returns. continue to

and Rahul details over the our Now guidance. segment for to results on our

full digits good single single Aircraft robust growth with freight expectation X% solid up and mid-single be quarter, narrow-body CES. be you, be Starting Dedicated up than of Thank to up that expected day, for narrowbody remained continue of to nearly with digits digits we in year. now with low expected as Passenger versus high and are overall second market. everyone. high departures departures to expect are up digits. year-to-date, Xx the departures prior LEAP a more the single XX% up remains to Larry,

grew XX% and visits grew Sustained X%, quarter. up more Services CES' Both XX% and were with demand. Revenue strength with second commercial with mid-teens results. services this order spare from deliveries. engine equipment material drove volume than significant more shop than Moving services and offsetting lower up load, parts strong internal growth time and momentum visit XX% quarter price to improved in pricing.

more As than expected, shop visits grew spare year-on-year parts.

expanding and by lower XXX improving Profit Equipment XX% more volume, from Supply both LEAP revenue improved of impacted engine the points, down pricing by services across also deliveries performance than lower offset This up in customer was offer. constraints This that mix shipments impact was billion, partially engine and impacted narrow-body with XX%. shipments lower expansion. margins equipment price. XX% LEAP and with investments profitability higher $X.X XX%, and services profit spare wide-body supported mix, driven chain shipments. offset basis increased from and declined and margin engine

delivered first nearly segment up profit XX% overall back, XX%. that Taking with up and a at CES, strong we half revenue services

predictably engines with FLIGHT The are Turning single We recently the achieved U.S. on the better on international mid-single significant running more continuing UH-XX With Army's for Engine this expected delivering up focused digits remains or deliver Improved future to both business XXX U.S. and DPT. the Program, integration in ITAP, Combat. resilient defense we sector a to spending DECK, invest low digits. Hawk. to Turbine X Black of testing and for milestone while

performance, to to significant war fighters TXXX the The have advantage on power that the decades necessary for battlefield will ensure and engine reliability come. maintain

results. Defense our timing primarily down to & Systems. to of orders Orders Turning due in XX%, were

and chain X%. pricing first approximately and when X%. compare significantly & and a quarter XX% more offset This the we from services delivered deliveries units. for in challenges was Systems higher Engine Revenue the supply X.X grew revenue Defense year-over-year down tough was book-to-bill than Defense were growth. X.X half. down

improved expanding price million, year-over-year, higher output, up and favorable was Propulsion grew higher Technologies pricing. costs. across the program-related $XXX absence of XXX points margins basis XX% and and mix, more than businesses, several from Profit XX% from productivity, product Additive output with

half business deliver DPT first $XX profit the billion. growth of year, delivered to improvement. nearly remains positioned the and revenue of significant well over term the medium The backlog single-digit a Through high operating with growth

million, cost Adjusted $XX intercompany wind-down cost corporate. of roughly than favorable structure actions and higher taken intercompany This XX% interest eliminations. to moment streamline Spending accelerate million more improvement $XXX eliminations nearly is on costs were that and down a elimination income year-over-year. offset our

simplify we our part completed on focus the efforts core, As of to electric sale our and continued insurance. this of quarter,

$XXX roughly the health of our actions business of Combined, block cash to a an result licensing reached in proceeds and to We of and these also life exit business. agreement million sell agreement reinsurance a insurance investing flow. will

Looking profit momentum ahead, the we the our results raising in business, and guidance. are strong cash our and

is low to teens. We revenue This high revenue CES of high to up be lower up prior guidance be to are includes digits our equipment guidance revenue now equipment our reducing lower output in expectations. to year high up given from LEAP flat CES. up to expectations double now expect output single X% Growth We single full projected of due year-over-year. digits updated engine

DPT expect high to low we mid- prior mid-teens, CES to overall at expect growth grow digits. continue single to of growth mid-teens. services digits Consistent double We putting with CES to guidance, of

CES, from expansion services from expected sales. expected prior of profit $X.X now $X.X up in lower primarily billion equipment be billion to billion now billion, This a previously, guidance to range $X.X $XXX midpoint from billion and margin $X.X Operating billion of $X.X $X.X at million improvement is with operating is the improved to be year-over-year. performance impact to to reflecting with profit

unchanged, DPT now and approximately $X $XXX intercompany billion million and profit below guidance previously. to is corporate are eliminations costs be from expected

and and our at tax unchanged, we guidance are to raising the Our expectations adjusted midpoint EPS more XX% higher $X.XX interest expense than profit range for are to $X.XX, growth. year-over-year up from rate

$X.X guidance above billion cash to given XXX% growth. conversion income free flow with of our raising $X.X to billion also profit net We're

capital working chain supply to of is reduce be the the While impact expected the we improvement lower given still to year, for expect to inventory. challenges

for $XXX you. back Overall, growth free positioned and significant is is in cash free to the cash flow at XXXX. GE million strong flow profit up conversion revenue, midpoint. with year-over-year All approximately Larry, in, Aerospace

Rahul, thanks.

a flight with As we proposition. sustained GE value tremendous as we advantages take Aerospace, competitive have

narrowbody, the With sectors. and platforms order. in largest industry's growing widebody across lead preferred provide our to fleets, reliability durability, are the and industry customers, prioritizing We're defense and SQDC by aiming that

to deep as times This to means time and talent, technologies customers With deliver defense. shareholders. our foundation, and delivering innovation we'll we're and our with poised deliver our And commitment exceptional both commercial customers. engineering wing in FLIGHT value create faster DECK and for breakthrough capacity unmatched domain for invest, on turnaround and expertise for to

$XX meaningful keeping progress innovation strategic in, the to priorities and in cash expect an profit XXXX grow excess paving operating of flight. compounding creating All flow income, free We're and generate making eye net million customers, future of we and to while sustainable to service more our approximately way the and with shareholders advance our towards a returns. employees for in

Now go Blair, let's to questions.

fellow the I'd we many so analysts can the Liz, Before queue your people we open open and as line? in get possible. the question can ask to you line, everyone X to ask consider as please

from question Our first Instructions] Melius comes Robert Research. with Spingarn [Operator

older point slower or CFMXX of wanted getting the about ask we on to even some doing one, shop as the airlines durability lives the work but maybe fourth this third of the I you, and where increasing are we've a narrow-body well the their customers know engines. your as Are seen talking aircraft shop scope programs visits visit? the don't of turbofan, your extending given take wants issues ramp who I just to to on

Well, of CFMXX quarter, years, the think think on that the even Rob, the your as one in few the the of but about right? really you workhorse and we next put still not clearly here, industry, important dynamics the underlying I finger is half second only the

to thought see utilization buffeted from utilization LEAP the share I the mean CFMXX, delighted is time begin the we people in if might up a at with we year-over-year to see consistent X a when points perspective. look

narrowbody of overall So powered north probably GE propulsion is XX%.

from in to And have So in going clearly, I and scope longer many a the a a think life volume from the is going both perspective. CFM aftermarket, that's us to fleets. help

maybe Larry Rob, a little add said. what to just to bit

the given had what and that mentioned shop start in peak 'XX, 'XX dynamics at that in then the And Investor mentioned is that Just visit sequential the he earlier, Day. see we we said projected we you XXXX. to are expecting previously downtick we

of at we as expect today, another declining. Now here shop we probably then is couple years XX% for maybe that that level do sit and plateau start

will are even coming third we XX, of program, shop that the is and the higher of definitely, extended XX period will visits. that that and the another we're years. getting time, X, So some shop visits commenting an and used the platform out be getting years, we seeing lessors for that leases with see And are for the X beyond seeing extended

will what So just said. we see definitely you

question Our next comes Walton Wolfe with from Research. Myles

delays types maybe XX in apologize of at that hoping, source the the of year? bulk parts. And bucket I actually the last those comment we're here on seem the sites and could can sites. where about or talking if of I'm background And was to you products the just be noise. at the supplier was suppliers. Rahul, X XX I Larry show. for It the

away, Myles, not you suspect. clear. far hear loud too I we can We're and

back I the in to was X go respect X challenge XX sites of said supplier what really if think we deliveries different April, with to these again you rooted with companies. was quarters

I the try core. slide think, is in than finger deeply mindset that really approach, again point, And we're to see collaborative with rather rather the the that to was constraints DECK And problem than And deck, these FLIGHT at really a we've understand going but that, this that doubling in gone that to strong, really I think problem-solving you going have blanket our evidence didn't to to able solve. finger-pointing sites that sequential something, of us outputs, point to those yielding results. inputs of immediately, to would expect right, to tells see approach us, We their nearly is is impact. showing we X/X be impact

different with everybody impact that everybody's have contributing, water, engine liked that what approach need Unfortunately, this we we would given working we new is a the about commodity way we're that here what need we 'XX. more, the half, fact as quarter across that particularly But classes to as be respect new we across those get think here didn't a the seen have I may in XX. all the third the July, until if shows of way will, here is And talk have a farm you in deliveries. at ore multiyear we right? ramp, No to or 'XX airlines better not think only well. certainly airframers or The in second to we one the loves order in delivered narrowbody that the not

in the the business all working have our time years customers just about But full need the and got wonderful us like tools. that I all the order challenge desire. thankfully, We've have. our met a have it's to to So what And fashion front suppliers our embrace in us, here, of we, ramp. effect in way this we really airframer airline

Our next Jefferies. Sheila question with from comes Kahyaoglu

Maybe CES I could about pretty if margins, awesome. which were ask the

QX at quarter. just versus deliveries deliveries had XX So the LEAP quarter the in QX, the less looking in QX

a $XX loss your about depending swing So assumption upon million there. profit

margins want QX in -- X,XXX improved points depending CES about what choose, QX of XX% service on basis margin QX to versus plus. so the 'XX versus implies X,XXX XX% of to XX% core So you that to

second spares? that half shop being visits So what think do despite than And we progression? better about drove how the

you OE overall of had the Yes. full year. and kind Sheila, But No, growth quarter we good with service for out. volume was for projected nicely, was was revenue a it the CES line as really in weak, pointed overall. recovered services what

in And from what very came services was were drop-through the of thinking. kind it we So strong. exactly

then well. profit services customer pricing profit heavier on mix, visits. the And time both revenue work visits shop as The along helped the shop those that helped growth. towards the and work. This, with And scopes material and skewed and were

And lower, higher equipment, shipments in deliveries within engine equipment, we engine our also investments. the but reduced were and spare

So the shipments. impact -- of and engine lower the that offset kind of

more OE anything profit than was overall, flattish So else.

Now first million to trends half as profit the guide. the gave at call we of look midpoint in by, million it, full $XXX expectations for confidence us to here raise the at that the $XXX year the

all favorability One, the driving being we $XXX favorable. just the is of both we services growth X into call well, through projected the that our what's as $XXX things. with and We that profit. mix flow midpoint are outward that half mentioned, things at are the that million to work second scopes now seeing. Now million, the lowered we guide, and for And then OE it, by, customer helping revenue the that

So that will million. is for $XXX is shipments. year level will the be for the our for $XXX year, where the CES Xx be up And are and that this being despite to of year, you the at margins flattish see million this profit CES of kind first

business So is really, with the along. really coming CES the happy way

comes next of Our question Barclays. line from Strauss the David with

would the things X were the into way lot quarter. are maybe with of just they kind suppliers, a -- things know in square deliveries you of but down but of I lower can these were you time, deliveries than progressing expectations. imagine Larry, just expected. same you're I LEAP were the this your talking lower the at getting XXX, better, obviously, dig Can internal XXX quarter? short kind that about shipments in

relative to we that is mind that the receive there to a be I right? to I want various Boeing, convert engine turn, timing and Airbus can an when do it repeat things of earlier. in think don't keep inputs one into win we what to or we deliver that to I in said dynamic David, is

the in I here might the net we in of that only sequentially challenging have think has underlying to and that didn't had the improvement We though, May number We recovery quarter, was in that see mentioned, was hoped. April So a continued July. ways. I build

haven't was seen that typically close that I We a somewhat to about. quarter concerned

reliably. think is delivery we more how and included So year, new is it why nothing do of we say were really is, more deliver rest more about about disappointing. the what we can focused, deliver It there's how the do where unit as we're the I

obviously that deliveries will basis, this thought, be modest up now than note and LEAP adjusting where lower still are year. You'll outlook year we our for flat a full X%, we think we we growth. somewhere showing On but between

what what more at for not doing importantly, healthier, us positions work That's our more inputs, do. the how stable, higher turn where with only to exit we're FLIGHT a knows think, in more think this come to more end of the the rate outputs we're the work supply given That's And be in to year. I but with expectations have, sharing DECK focused. we're do, base, I team we customers

question Seth next of Seifman with the Our JPMorgan. line comes from

of kind to thinking that delivery question up progression follow and just on last on the wonder, I the about side.

off significant the can is much color pretty I possible more QX the there across be make to dynamics significant you year. to think Should it company. Is level the progress other increase equipment QX? expect that much any you to the for get going provide need a of -- the about we in sequential in guide QX? And revenue a to progress

me on let Seth, anything by kind will up a and we little can shape maybe half delivery of about back the think Larry there's bit add side. the more if talking just start how

first to half Listen, as our at you half growth. second look overall,

growth. full for with we what delivered we've it's the And X% half, in about First are kind line of year. projecting

services growth The half. OE is both year-over-year look and similar half quarter first going ramp. year-over-year the our and between higher will growth as So fourth to second in be

that. see we'll So

well. in Now higher the the versus the be be primarily in fourth higher impact Xx and corporate will XQ be and quarter margins terms shipment since quarter fourth going the of is drop-through, in profit in as will expenses XQ to

third flattish since expect the of year. last quarter be strong margins to year-over-year we XQ kind the So

operationally, how we've kind to if look at had XQ start now So to better a you of XQ. getting looks

significantly X third the of -- month mentioned that weeks quarter Larry number we higher in than April. are in think prepared in his third the quarter July the I we've in first shipped remarks, the the delivered of what in in engines first here

So sequential progress. seeing are we

material material the the in April, second look weeks you at a and we have output in these in through as And the weeks X we've quarter, if compare improvement. suppliers then seen the been that X significant for imports first first import the even July constraining versus

here that's the So improvement to quarter. allow sequential third to in going us drive the

off think start. add? we sure. good here a Anything to are I work But More been to So do for to has encouraging. July

You got it.

Our next with comes Gautam line question the from Khanna of Cowen.

I curious the much follow chain, folks some up. you and are what you supply ahead, year? the your the bit of down of a to And projection LEAP how you're talk given with folks the strategy some constrained guidance? little inventory was Could given process about to the So folks. Like in are just start some maybe to are can slowing actually in speak probably relative absorbing incrementally you the is if lower

If could about in, any that just what talk you you inventory can provide? you're color dynamic, absorbing incrementally

and I'll just we'll reverse order, maybe those start. in take Well,

trying. with way to that in we trying trying as slow make think really to is about that from think back 'XX. to we about The everybody places, as think you 'XX, a aren't need as think calibrated we're folks about different what in the are because, half, really we're way. point down as respect think about I I different meaningful We're we we out, sure we it

more that is to was I unduly down want X well, rates with turn year-end the probably part inventory pandemic. likelihood, do we we all calibrate don't down would that been and what we has of are the don't And like to so those challenging carry some, as at this in ramp the we do paces. than even will, dialed to and that the for want industry so performing the in think today, head almost we reason folks well why maybe scratchingly is

availability flow in them, will, that flow, a as some we've to in more with about some is we're extent next them that over rooted we've is lean need think only sure view performing. ramp. all over folks you the want that base for the got months, of a ourselves inventory investment if So really is the predictable that from the in the supply to, coming a we've make X to don't lot We and to Remember, effect an that are around instances, got penalize years. going we but frankly, not taken

our And Q. Gavin, in you'll see that

significant the first I billion which here half is, think of We've what $X.X higher the on. in of in you're to the half close call we year, $X.X inventory spot first seen of growth grew inventory growth, it, last. billion than

So headwind here. significant

in inventory Now think do with obviously, grow the here was the And here. down then it a of the of of improvement half that as in significantly be the will as pace we slow much are last the the growth second we of year for year, headwind won't it second half the that projecting half will while year, output the in second of year.

XXX% that been billion But in appropriately been the had manage the has year, conversion. as pool trying said, despite again, we challenge. it still a to is, as good as manage something But the of is half of news growth can. Larry $X it and So first we've the inventory we

cash strong in year-over-year up was about $X the Cash So first half. billion growth.

of in kind the better try half. it, managed second we we to absorbed and do So it

Our of next question comes Scott line from with the Deuschle Bank. Deutsche

undergirding not Larry, trying X could bottlenecks detail Basically understand more just on fingers, of if you remaining beat and on at in I to something this at those, the get to this offer are sites this investment forging horse, bottlenecks. wondering the question. common or point? casting some to I a was wanting broader not there's earlier just following point so a but side but to suppliers. Myles' or down key supplier we're up that if dead sense guess, suppliers it's of And for a if I pointing you remaining whether set appreciate

Got it.

that. heard you've me think clearly. I I appreciate pretty

is common and those of and at while problem where everyone frankly, the need we better, the GE convinced I'm headset across need that be the fully Aerospace. that to That's we denominator we do more collaborative are. XX takes different is, have suppliers to think I those X sites forms that all suppliers, of in solving mode.

Some it's others, more race, right? progress long but made a than

problems, this a folks got the This perspective, commodity to got and I pace get not of of is perspective, the those teams doing, granular constraints have need We've here, go into up category in sprint, much as to geography operational that matter, more regardless second XX-day where just a quarter We've was think, a to detail to from right? think solve we doesn't raise half. capacity publicly those the do are in bit marathon. a from to been held, lot And privately We've get and in. got increased yields broadly just I second it deep. the a a unlock the picked held,

next question from Stallard Vertical Robert line of Research. the with comes Our

Just the your confidence in Larry, new the GE's following up to engines in chain your airframers their and in delivering broader earlier confidence deliver second of What's the relative also ability supply on catching parts? the forecasts comments, from half. and your and also

high they're specifically, what confidence. the manage, around We're focused customers' leave I guide here, we LEAP is certainly think on we'll commentary everything of right? our And aided Well, managing. color think can on to I the

prepared It come be wouldn't out to wouldn't our But get you It our do. of in remarks mouths. otherwise.

team start a in we're work. respect many to to the to is days front focused encouraged impact, you. can where us. second of We've quarter got that by completely. as well. got we've this of work I That's think I do the July assure with But lot

with question of Sachs. line next Goldman Poponak the Noah from comes Our

aftermarket the of I are XX dollar growing faster air much this does Slide the that overall guess, growth year on are that to levels that services show than services is recover much the revenue You accelerate What's and orders can year? And much has normalize absolute higher. CES actually behind fully next LEAP? that versus How suggest we that? growth. as travel Eventually,

we No, top mean or had second you're no, the a of, kind mid-XXs in as a saw first XXXX. half. had Strong in XX% I half. the on mean, right. We for a book-to-bill good here first good second services first book-to-bill year said, were you quarter, of of so orders. orders the for we on half quarter the I good up

expecting spare the at momentum and bit So definitely growth in on a there higher shop both the second to side. is basis. the on you parts the first the half back a And be we in half, of right, as on the the services look little year-over-year year, half services than visits the are

growth imply we year-over-year second half the mid-teens the delivered X% be low closer to visits of look the that basis. And on to would of our a if in teens visit will that internal visits, shop shop high So in guidance year you shop the on at first half year.

what projecting. So are that's we

the But growth, that will consistent future overall, services we it's is what years mid-teens like. with think and look

said growth. I see, good think that Larry as to departure at had we on see we to traffic we good the our XXXX look services well. -- overall strong It's earlier, air share orders continue gaining side outlook, when strong growth, as the

will the Parsons come of . with line next question Gavin Our from UBS.

for of both older clearly it's I couple engines, X. But mean, warnings over strong or week on the I profit new life demand question last aircraft. earlier growth and guess extending airline been a of Rob's to

you've ask with fleet early pricing any discussions other had your be from any planning, to wanted just I indications relating to changes? or customers, whether to sensitivity if So it

follow really the U.S., ago, would well, think earlier not will to in that's are of you but gavin, the Rahul's here our that. way we the with Again, imagine, orders customers as any CES remain I on second the in XX% speaking effect up comments closely, don't watchful, Europe to the services to anticipate question, both, globally. quarter, in to And moment in a us. business. that our have pretty all We seen

it's look terms spares of how much at at in the have just activity here the point. quarter in I backlog, range we in of third we the where I think in this are XX%

well point would that So the also year. very utilization CFMXX, the the quarter. No positioned change on again, I we still here to strong. And early real in just this see

the X And share. taking the of uptake, the LEAP upshot points market of

than strong. take remains that Europe be pricing the comments activity seemed it narrowbody you GE-powered more yesterday, in anything were here just So oriented else. out to

both But new to wide out. aftermarket with strong and our keep demand, with exceptionally keep we'll make. now, So our a this eye again in right up the challenge, struggles

line come Gursky with Our next Citi. of Jason the from will question

minutes conversations the the Larry, I you there maybe spend wondering customer you was an engine just point, on you rise acceptance think what more customer point? on just shaping I'm few and development are is if Farnborough, going, milestones this up how there, you're that curious mentioned is provide a this at showcasing the could of kind and at to -- going look to like update

build row the in only air This engine interest the the now front only or rise, engine say but center show customer attended and open would we're activity to the fan, of I doing when compact not third we seems also hybrid I've of time. that RISE that core about the with open umbrella and is passage fan on a SaaS. Jason, work talk here. talking electric we're different Obviously, everything technology an programs, about with our really

fan, endurance a of campaign And are you the airfoils. been think I first with to lot high-pressure do as work ingestion electric respect Blade people the that or good with we've test But very turbine elements with open the hybrid is in respect our we sharing a with we open quarter, had starting with been what may work NASA. that, architecture that fan with there's of second know, to the we test

wind I mentioned, in I that testing in Airbus. Europe think, we've done the here conjunction with earlier

development with CEO that virtually conversation have interesting, component airline over think, in a level level tests I still it, But tests, got effort. think particularly no go. XXX about here mistake Europe, in maybe I we we've sustainability. talk module there, that Make XXX long us So every I a way what's technology to -- is starts the this behind to it's

on think we the and because enthusiasm capacity continues talk to in we're at support that And to but build ahead that narrowbodies. And hard step-up really what I'm going propulsive of of go with very we flight. is SAF XX% our scale reduction about enable keen SaaS fast generation target to being of emissions I And and to efficiency is available that future Fab. and story get compatibility, also next that progress the making rise, the do Open know views are that ultimate to we the

question. time for last X have We

will Fargo. line the of Matt from come Akers Wells question This with

on LEAP are kind ask, lower are deploying of a wanted volumes what like bit issues. to work running little supplier I to given just than of a of breakeven kind through timing that the latest you're of your lot some thoughts and sounds resources it

all? the at shifted Just timing curious if has

Yes. timing not has shifted.

program our profitable LEAP we XXXX. LEAP to in and as mentioned than be XXXX thought we remarks. to year, in that prepared in services, better in fact, evne what here originally So expected started little And the a we shaping bit we and the

that making that's were the shaping overall durability expecting. is we progress how So the we're up program on

tracking AXXXs LEAP CFMXX with at are cycle the the be to of will life It year. be line this in stage CFMXX the of performance better end performance the we expecting than on by LEAP

happen testing the So completed fourth a we've and huge milestone We've improvements was that. the that, that here is hours that on given in X,XXX the from all HPT to the thing -- that more X,XXX we obviously was been than of driving, quarter. last LEAP expect

going that's well. really So

a next should way better exactly have services So all like break would program LEAP's we in, liked even the bit pressing year. little think I

Larry, comments? any final

you. thank Blair,

close, them live in of to responsibility our people that purpose, team home GE share flight the the to up to lift we to and invent just think grounded Aerospace to stay bring I going future safety. is the

and, your So in your GE time interest we really course, today of appreciate Aerospace.

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

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