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On April 2, General Electric completed its spin-off of power generation company GE Vernona (GEV), leaving the aerospace business as the last remaining piece of what was once a sprawling industrial conglomerate. That aerospace business, which is now known as GE Aerospace (GE), issued its first quarterly report since the spinoff, although the results included Vernona's numbers for the last time. As such, the Q1 earnings report was a bit on the messy side since it was unclear whether all analysts' estimates accurately reflected the impact of the spinoff.

However, what is clear is that momentum is continuing for GE after the split as demand on both the commercial and defense sides remain strong. Overall, GE's total orders soared by 34% yr/yr to $11.0 bln while operating profit increased by 24% to $1.5 bln.

• GE now separates its business into two operating segments: Commercial Engines & Services (CES) and Defense & Propulsion Technologies (DPT). On a revenue basis, CES is about twice as large as DPT at $6.1 bln (+16% yr/yr) and it continues to experience solid growth on strength in both services and equipment.
• It's no secret that commercial airlines are seeing an upswing in maintenance and repair needs, especially as Boeing (BA) continues to contend with quality control and production issues with its 737 MAX jet. Accordingly, services orders increased by 18% in Q1, driven by spare parts growth across the narrowbody and widebody markets.
• BA's production setbacks may be fueling stronger demand on the equipment side, too, which generated impressive order growth of 78% in Q1. Through a 50-50 joint venture with Safran Aircraft Engines called CFM International, GE helps manufacture the LEAP turbofan engine, which are used to power Airbus's (EADSY) A320neo jet -- a direct competitor to BA's 737 MAX. In the earnings press release, GE credited robust demand for LEAP for the surge in equipment orders.
• Turing to DPT, orders spiked by 34% to $3.0 bln and operating profit increased by 26% to $300 mln on a combination of favorable price and volume. Given the volatile geopolitical environment around the world, demand for defense products -- including the engines, propellers, flight control, and power generation components that GE provides to the military -- should remain quite healthy for the foreseeable future.

The bullish outlook for CES and DPT is reflected in GE's FY24 guidance, which calls for adjusted revenue growth in the low-double-digits and operating income of $6.2-$6.6 bln, up from its prior forecast of $6.0-$6.5 bln. Overall, the story for GE remains much the same as it did before the spinoff: namely, underlying demand for aerospace is strong as the travel industry's resurgence continues and as governments bolster their defense budgets.