General Electric crushes earnings estimates, inventory rises. But this is not the best part.

GE reported adjusted earnings per share of 27 cents on sales of $13.7 billion in the first quarter of this year and adjusted earnings of 61 cents per share on sales of $17.9 billion in the second quarter of 2022.

For the full year, GE now expects to earn between $2.10 and $2.30 per share. In April, GE said adjusted earnings for 2023 should fall between $1.70 and $2 per share. The midpoint of $2.20 for the new guidance is 35 cents above the old midpoint of $1.85, and the increase of 35 cents is more than the 22 cents by which GE beat its second quarter estimate.

Free cash flow guidance for the full year was also raised. GE now expects to generate free cash flow of approximately $4.3 billion, up from previous guidance requiring about $3.9 billion.

Shares were up 1.6% in early trade.

Standard & Poor’s 500

Futures gained 0.1% and

Dow Jones Industrial Average

The futures contracts were Latin.

This is breaking news. Read a preview of GE’s earnings below and check back for more analysis soon.

GE’s stock is on fire, helped by a recovery in global air travel and improved profitability in its energy division.

Second-quarter earnings come in early Tuesday — and it better be good. The stock’s epic run is one reason. Wall Street is the other.

Analysts are looking for earnings per share of 46 cents on sales of $14.8 billion. GE reported EPS of 27 cents on adjusted sales of $13.7 billion in the first quarter of this year and adjusted EPS of 61 cents on sales of $17.9 billion in the second quarter of 2022.

Sales and earnings were down year-over-year, but this is the second reported quarter since GE launched the healthcare operation, now known as GE HealthCare Technologies (GEHC), in early January.

Investors are hoping for a quarterly profit and quarter. Just look at the stocks. GE shares are up about 37% over the past three months, 67% so far, and 108% over the past 52 weeks. The improved profitability and free cash flow that came due to two subsidiaries — GE Healthcare and GE Energy Business in early 2024 — are key reasons.

By comparison, another aerospace-focused industrial conglomerate shares,

RTX (RTX) is down about 2% over the past six months, down about 4% year-to-date, and about 3% over the past year.

Just like investors, Wall Street feels good about GE these days. This is another risk heading into the quarterly report.

In April, GE said its 2023 adjusted earnings per share should fall between $1.70 and $2 per share. Analysts expect $2.06, more than 20 cents above the midpoint of GE’s guidance. This is not typical. Analysts generally listen to management teams.

So Wall Street expects cadence as well. Anything less than that could depress the stock.

In addition to the announced earnings, analysts will be looking for an update on the energy business. Aerospace is General Electric’s largest division, which is also important. However, the company has just returned from the Paris Air Show where it has been talking about flying excellence.

“We’ll listen to see if any of the recently reported wind turbine quality issues at Siemens surface at GE, to what degree,” RBC analyst Deane Dray wrote in a report reviewing GE’s earnings.

Siemens Gamesa is General Electric’s wind competitor. Gamesa is owned and partially owned by Siemens Energy (ENR. Germany).

Siemens (SIE. Germany).

In Monday’s trading, GE stock was basically flat. The S&P 500 and Dow Jones Industrial Average rose 0.3% and 0.5%, respectively.

Write to Al Root at [email protected]