Business Corpus: GE Aviation Partner Safran Expects Leap Jet Engine Delays To Clear UpGE aviation partner Safran significantly boosted its full-year outlook after reporting stronger-than-expected profit and sales for the first half of 2018, lifting hopes for the next-generation Leap engine and helping to drive General Electric stock higher. The post GE Aviation Partner Safran Expects Leap Jet Engine Delays To Clear Up appeared first on Investor's Business Daily.

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GE aviation partner Safran significantly boosted its full-year outlook after reporting stronger-than-expected profit and sales for the first half of 2018, lifting hopes for the next-generation Leap engine and helping to drive General Electric (GE) stock higher.

France-based Safran said the transition from the older CFM 56 jet to the more efficient Leap engine — a rival to the geared turbofan engine from United Technologies (UTX) unit Pratt & Whitney — was "on track."

Leap engine deliveries almost tripled in the first half of 2018 to 438 engines, vs. 147 engines in the first half of 2017. Leap orders stood at 15,450 engines as of July.

"On the operational front, the ramp up of Leap production is proceeding and our objective remains to deliver around 1,100 Leap engines at the end of this year," Safran CEO Philippe Petitcolin said in a statement. GE expects the Leap production rate to nearly double to more than 2,000 engines by 2020.

Analysts at Bernstein reportedly expressed strong expectations for Safran's Leap engine following the results. Safran jointly produces the Leap with GE through a 50/50 joint venture, CFM International.

In the past year, GE, United Tech and Rolls-Royce — the world's three biggest aviation-engine makers — all hit snags as their new generations pushed designs and materials to the limit. The technical and manufacturing problems have frustrated customers such as Airbus (EADSY) and Boeing (BA) and have grounded flights of airlines such as India's IndiGo.

GE stock rose 1.15% at 12.70 on the stock market today but remains mired at multiyear lows and under the 50-day and 200-day moving averages. Dow Jones component United Technologies (UTX) gained 0.45%. United Technologies stock is in a cup-with-handle formation with a 136.76 buy point. United Tech's Dow industrial conglomerate peer 3M (MMM) dipped 0.1%.

Meanwhile, Boeing rose 1.3% Thursday as it eyes a still-far-off 374.58 buy point. Airbus gained 1.6% to test the 50-day line after falling in the prior four sessions.

GE Aviation: Crown Jewel

GE and United Technologies are switching to new jet engine models amid surging orders due to an air travel boom.

Many analysts count on the new and advanced engines to shift from a drag on earnings to significant profit-drivers over the next decade.

GE Aviation, the crown jewel of General Electric's vast portfolio, is of increasing importance to the Boston-based company. In late June, GE announced the results of a yearlong strategic review, which will see it focus on power, aviation and renewable energy in years to come.

In the first half of 2018, Safran's adjusted revenue hit 9.506 billion euros, up 10% on an organic basis. Adjusted recurring operating income rose 33% to 1.386 billion euros. Both topped estimates.

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The post GE Aviation Partner Safran Expects Leap Jet Engine Delays To Clear Up appeared first on Investor's Business Daily.