(Reuters) -GE Aerospace (GE) raised its full-year profit forecast for the third time this year on Tuesday, driven by strong demand for aftermarket services from airlines that are relying on older planes to make up for the shortage of newer aircraft.
The groups share price was down over 4% before the bell on Tuesday.
Production issues at Boeing and Airbus have led to slower delivery of newer planes, troubling the airline industry, which is seeing unprecedented demand for air travel.
That has forced carriers to keep older jets in the air, driving up maintenance costs and helping the sales of spare parts and services provided by companies such as GE Aerospace.
The company expects an adjusted profit of $4.20 per share to $4.35 per share for 2024, compared with its prior forecast of $3.95 to $4.20 per share.
"We grew earnings 25% and produced substantial free cash flow, both largely driven by services," GE Aerospace CEO Larry Culp said on Tuesday.
CFM, its joint venture with France's Safran, is an engine supplier for Boeing's 737 MAX jetliners and competes with RTX's Pratt & Whitney to power Airbus 320neo jets.
Profit at the company's commercial engines and services segment was up 16% to $1.8 billion on revenue of $7 billion, which rose 8% from a year earlier.
The company said its adjusted profit for the quarter through September was $1.15 per share, compared with 92 cents reported a year earlier.
However, like the rest of the industry, supply chain issues have hindered GE's ability to ramp up production of new engines and parts.
Airbus was compelled to lower its full-year jet delivery targets in July, blaming delays in deliveries of LEAP engines built by CFM, among other parts.
"While there's more work to do, we made meaningful progress with engine deliveries improving more than 20% sequentially while also expanding aftermarket capacity," Culp said.
GE Aerospace's total revenue rose 6% to $9.84 billion for the third quarter ended Sept. 30.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Anil D'Silva)