AI Summary
5 min readGE Aerospace delivered a surprisingly strong earnings beat in the third quarter, led by its engine business, which came in 7% above consensus on earnings. But the market reaction was muted, and analyst Lou Whiteman thinks the market is getting this one about right. The strong results were driven by services—spare parts were up 20% on the engine side, and maintenance work rose 17%—reflecting that airlines are running their existing fleets as hard as they can. The problem is timing. Airlines have indicated schedules will fall off a cliff come January, and GE’s own raised full-year guidance implies a fourth quarter that will come in below consensus. “The cycle hasn’t collapsed, but we are in the late innings and you’re buying at 40 times earnings,” Whiteman said. The big question is how this trickles down to maintenance, repair, and overhaul (MRO) companies. If demand softens, airlines could reduce how fast they turn planes around, which would be bad for MROs. But even in a slowdown, planes pulled from passenger service often become cargo jets, keeping some work alive.
General Motors: Strong Quarter, Same Old Questions
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What you'll learn
- 1 (00:09) **Earnings Season Kickoff: GE Aerospace** - Lou Whiteman starts with GE Aerospace's surprisingly strong earnings, led by engine services and spare parts.
- 2 (04:08) **General Motors: Solid Quarter, Tepid Market Reaction** - Matt Frankel analyzes GM's earnings beat and the market's muted response.
- 3 (07:26) **GM's EV Strategy and Affordability** - A discussion on GM's pivot away from EVs and toward hybrids in response to rising prices.
- 4 (10:24) **M&A Deal #1: Salesforce Acquires Braze for $5.7 Billion** - The hosts discuss the rationale behind Salesforce's acquisition of the customer engagement platform.
- 5 (14:46) **M&A Deal #2: Tradeweb Markets Acquires Trumid** - The hosts analyze Tradeweb's acquisition of the fixed-income trading platform.
- 6 (21:35) **Mailbag: QXO and the Brad Jacobs Roll-Up** - A listener question about QXO, a building supply roll-up, and its 46% year-to-date decline.
- 7 Standout Quotes
+ Full timestamped outline available in the app
Show Notes
Third quarter earnings reports are coming in fast, but this week kicks off with two Hidden Gem stocks making acquisitions to shore up their businesses. Lou, Matt, and Tyler discuss Salesforce's acquisition of Braze and Tradeweb Market’s Trumid acquisition. Plus, a mailbag about building supply company QXO.
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Tyler Crowe, Matt Frankel, and Lou Whiteman discuss:
- GE’s earnings in a time of high fuel prices
- GM’s earnings (also in a time of high fuel prices)
- $CRM’s deal for $BRZE
-$TW’s deal for Trumid
-Mailbag
Companies discussed: GE, GM, F, CRM, BRZE, TW, QXO
Host: Tyler Crowe
Guests: Matt Frankel, Lou Whiteman
Engineer: Dan Boyd
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