GE Aerospace (GE) shares tumbled 5.02% in pre-market trading on Thursday, significantly underperforming an earlier report of a 2.9% decline. This sharp downturn comes amid growing concerns over engine delivery delays to major aircraft manufacturer Airbus.
The stock's movement appears to be closely tied to statements made by Airbus executives regarding supply chain issues. Notably, an Airbus executive reported that CFM engine delays are the main bottleneck in single-aisle aircraft deliveries. CFM International is a 50-50 joint venture between GE Aerospace and Safran Aircraft Engines, making this news directly relevant to GE's operations and financial outlook.
According to the Airbus executive, the company has nearly 40 undelivered single-aisle planes waiting for engines. This backlog could potentially impact GE Aerospace's revenue and profitability in the near term. While Airbus maintains its delivery guidance and is "cautiously hopeful" about meeting targets, the ongoing engine supply issues seem to have spooked investors, leading to the significant pre-market drop in GE Aerospace's stock price.
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