108 annotations
Okay. Larry or Rahul, you called out freight as a source of growth in the quarter, and I think you raised your full year outlook there from sort of previously down maybe low single to now up low single as we think about the impacts in CES. Is that just in relation to what we've seen in the Middle East? Are you seeing other fundamental changes that give you more confidence there? And how do we think about that impact specifically as we think about the CES business and where you're seeing that flow through?
H. Culp
Well, Ken, you're spot on. We're taking that, again, to level set everybody from an outlook we had us down mid-singles this year to now a positive low single-digit number.
I think there is some influence here from what's happening in the Middle East, but I think we're just seeing a higher demand overall from an air cargo perspective. That will principally course through our wide-body exposure more so than the single-aisles. And I don't think we're going to quantify it here, but that's certainly part of what is behind the improved service outlook, and thus, the improved overall outlook for the rest of this year.
imprved freifghr outlook?
Transcript
2024 Q1
25 Apr 24
ut as you go through the year, keep in mind that the equipment growth will ramp in the second half of the year. Equipment growth will also include 9X shipments. And the services mix will skew back towards the shop visit growth, which we still expect to be maybe low to mid-teens for the year.
So the second half profit growth on a year-over-year basis will be lower than the profit growth that we'll see in the first half.
look out fir mgn pressure in H2 as equipment growth ramps
Transcript
2024 Q1
25 Apr 24
CES
CES
Transcript
2024 Q1
25 Apr 24
DPT,
DPT
Transcript
2024 Q1
25 Apr 24
The strength of our operational and financial fundamentals gives us confidence to return 70% to 75% of our available cash to investors. Earlier this month, we initiated a quarterly dividend at $0.28, a 250% increase. And at our Investor Day, we announced a $15 billion share buyback, a testament to the strength of our balance sheet.
70%-75% return to invetors
Transcript
2024 Q1
25 Apr 24
And then on the question side of things, the -- just kind of curious how the customer tone is these days on the narrow-body side win with those airlines where you're competing for slots against the Pratt & Whitney engine, whether the tone of those conversations is any more constructive for you in the competitive environment, is looking more optimistic for you on head-to-head competition against the Pratt engine.
H. Culp
Yes. I would say, as I think both Rahul and I have commented, that we're well calibrated with Boeing on the LEAP-1B requirements. We'll leave it to Dave and Brian to speak to the details tomorrow.
I think as we look forward, not only with that engine, but others, the supply chain challenge that we've touched on in prior calls continues to be relevant.
With respect to new business, I think if you look at our win rates, particularly in the narrow-body space over the last several years, we've been very encouraged by the sequential trend, the upticks that we have seen there. And we will continue to work hard to earn the business that ought to come our way. No change in that posture whatsoever.
leap
Transcript
2024 Q1
24 Apr 24
think it was just even last month at Investor Day we talked about how retirements have been lower than we would have anticipated thus that should yield 200 incremental shop visits in 2024 relative to what we anticipated.
I think as long as capacity demand remains strong -- I get a report every morning at 6 a.m. This morning showed our departures on a worldwide basis across all of our platforms up 7.8%, right? That's part of what Rahul alluded to in our prepared remarks with respect to our more optimistic outlook with respect to passenger demand. We know the airlines are looking to generate as much lift as they possibly can. And to the extent that they're paced by deliveries, retirements will slow and that installed base will be worked. Unfortunately, much of that came from our factories and we're well positioned to support that.
Does that push out the timing of perhaps peak CFM56? Yes. But it's early, right, and I don't think we're going to try today to take a quarter in that time frame as to when that might occur. But it's a positive dynamic for us in the aftermarket, both with existing platforms and increasingly with the LEAP.
leap delivery delas likelyt opush out peaj cfm56 shop visits
Transcript
2024 Q1
24 Apr 24
The mix shift from -- mix shift in OE from LEAP to wide-body mix helped, and also in services, our spare part volume growth was higher than shop visit growth.
So that mix shift in services was a contributor as well.
So encouraging start.
mix shoft from LEAP to wide body mix helps mgn
Transcript
2024 Q1
24 Apr 24
Now with the pushout of LEAP volume, that headwind of the 2 points is marginally lower. But now if you step back and look at our overall guide for the year, listen, a strong start to the year.
We are pleased with where we are and that has given us confidence to raise guidance for the full year. And we expect the momentum to fully continue as we get into the second quarter.
And overall, for first half, we are expecting about low double-digit revenue growth and about half of profit and free cash for the year, so far more linear year than we've done in the past. And overall, as you step back and look at the full year, profit up $150 million at the midpoint of our guide to a range of $6.2 billion to $6.6 billion, call it, mid-teens profit growth and more than 30% EPS growth.
So it will be a good year if we deliver these numbers.
leap pushout helps margins
Transcript
2024 Q1
24 Apr 24
78%; Defense Propulsion & Technologies, up 72%. How much is that volume versus pricing?
Rahul Ghai
Ron, I would say most of that is volume. And pricing helped across the board, showed up in our revenue growth, margin expansion and in the orders outlook. But of a 34% increase in orders, I would say most of that is coming from base volume growth with price contributing as well.
orders growth v strong
Transcript
2024 Q1
24 Apr 24
Great. Congrats, Steve. One to Larry, Rahul, wanted to ask about the updated LEAP delivery guidance now, 10% to 15%, down from 20% to 25%. Could you just dig into that a little bit what drove that? Is that constraint on the supplier side? Is that Boeing taking down their schedule? What exactly went into that?
H. Culp
Yes. I would say that, that clearly is a change here in the update this morning. Dave and company are going to talk about their rates tomorrow, I'm sure, on their earnings call so we'll leave that conversation with them.
But rest assured, as we are with all of our customers, we're well calibrated and aligned with respect to what we need to do, what they need from us as we look forward. But I think, all of us, particularly at this moment, before we talk about rates, always come back to make sure we're doing all that we can on the safety and quality front to ensure the best possible performance of our products, both as they're being manufactured and then, in turn, deployed in the field.
LEAP unit production cut
Transcript
2024 Q1
24 Apr 24
We now expect margins to expand roughly 50 basis points for the year versus flat previously.
marfgins to expand now
Transcript
2024 Q1
24 Apr 24
Revenue grew 16% with volume up low double digits and the remainder driven primarily by higher price. Services growth of 12% was driven by pricing and strong spare part volume, which grew faster than internal shop visits that were up 3%, impacted by material inputs challenges. Equipment growth of 31% was driven by pricing and deliveries, which were up 2% with higher wide-body engine mix. LEAP shipments were roughly flat year-over-year given the supply chain challenges.
services growth>sjop visuts
Transcript
2024 Q1
24 Apr 24
or the year, we now expect departures to grow high single digits. Total departures are off to a stronger start versus our prior expectation, growing 11% in the quarter with particular strength in China.
string sta4t for depasrtures
Transcript
2024 Q1
24 Apr 24
Given our solid start and constructive outlook for rest of the year, we are raising our full year profit and cash guidance, as outlined on Slide 11.
We continue to project at least low double-digit revenue growth.
In CES, we still expect revenue growth of mid- to high teens. In services, we continue to expect mid-teens revenue growth with shop visit output growing faster than spare part sales.
We are anticipating reduced LEAP output in the range of 10% to 15% growth, but continue to expect overall equipment revenue growth of high teens from improving wide-body mix.
In DPT, we continue to expect mid- to high single-digit revenue growth, primarily driven by equipment growth. Operating profit is now expected to be in a range of $6.2 billion to $6.6 billion, up from $6 billion to $6.5 billion previously.
CES operating profit guidance is now expected to be in a range of $6.1 billion to $6.4 billion, up $100 million at the midpoint from favorable revenue dynamics. DPT profit guidance is unchanged.
In corporate, we continue to expect cost and eliminations of about $1 billion, including $600 million of corporate expenses and roughly $400 million of eliminations. We now expect margins to expand roughly 50 basis points for the year versus flat previously.
Now as a standalone company, we are initiating adjusted EPS in a range of $3.80 to $4.05, up more than 30% year-over-year. This includes first quarter adjusted EPS of approximately $0.92, up more than 40% year-on-year. And on free cash flow, we expect higher profit to flow through to cash, delivering more than $5 billion with conversion well above 100% of net income.
Overall, we are encouraged by the strong start and the market environment that gives us confidence to raise our performance expectations for the year. Larry, back to you.
vut leap output guidance. rause msargin ad pft expectaytions.
Transcript
2024 Q1
24 Apr 24
We're raising our full year operating profit guidance and see a path to our $10 billion operating profit target by 2028.
raisew guide
Transcript
2024 Q1
24 Apr 24
And then spares growth kind of moderates and the spares growth will be below that of the shop visit growth. When you combine all that, you get to that mid-teens services growth that we just mentioned.
spares growth moderating in 2024
Transcript
2023 Q4
4 Apr 24
On a stand-alone basis, including roughly $600 million of corporate and other stand-alone costs, this comes to approximately $6 billion to $6.5 billion of profit and [ implies ] flat margins year-over-year given the growth in LEAP, initial MinEx shipments for the 777X platform and other growth investments.
fklat margins due to LEAP
Transcript
2023 Q4
3 Apr 24
Myles, I think from a CES or commercial engines and services perspective, we're going to see engines lead the way. Engines will be up high teens plus.
I think you're going to see services in the mid-teens area.
Specific to your question, from a LEAP perspective, what we anticipate right now is a 20% to 25% increase in unit growth
20%-25% LEAP growtgh
Transcript
2023 Q4
3 Apr 24
Strategically, today, we're executing to meet customer needs for engines and services. Despite the challenged supply chain environment, in the quarter, total engine deliveries were up 11% sequentially, including Defense, up over 60%. We delivered 1,570 LEAP engines, representing 38% growth yet with more to do going forward.
38% more LEAP deliveries in 2023
Transcript
2023 Q4
3 Apr 24