A huge progress in the manufacturing of commercial jets is fuelling the profits of suppliers, with the corporate results of the U.S on Friday highlighting the strong demand coming from the industry of aviation even in a global economy which is not really that strong and stable.
The earnings they are getting today may stabilize the confidence of investors in manufacturers getting exposed to this sector, balancing concern regarding other markets just like energy and the overall worries regarding the stagnating growth in areas outside the borders of the U.S.
On Firday, the GE.N or General Electric Co made reports mentioning a profit rise of 16 percent of the aviation unit it has and a jet engine order book that is bulging. HON.N or Honeywell International aerospace revenue defeated the forecast of some analysts, while the profit margin of the division became better.
TXT.N or Textron Inc, Cessna maker, had their shares soar over nine percent when it increased its profit forecast for the entire year.
According to Charlie Smith, the Fort Pitt Capital’s chief investment officer, the best place to go into industrial is the segment for aerospace. Fort Pitt Capital is holding shares in GE and Honeywell. He also added that if they are in the correct industries, they are going to get some sort of protection against any macro pain that will hit China or Europe.
The results released on Friday may bring good forecasts, too, for other manufacturers with businesses in the aerospace segment just like United Technologies, Parker Hannifin and Eaton Corp, as said by John Heslin, the Tradition Capital Management vice president, following industrial companies.
Heslin also said that while growth is increasing and the economy is getting worse, they think that aerospace is going to be a steadier end market, since it has legs.