By Rajesh Kumar Singh, Shivansh Tiwary

(Reuters) -GE Aerospace said on Tuesday it was still wrestling with supply-chain constraints that have led to a decline in jet engine deliveries and are weighing on its revenue, sending its shares down 8%.

The company said the constraints have impacted the shipments of engines for both narrowbody and widebody jets, leading to a decline in total engine deliveries in the September quarter from a year ago.

The comments overshadowed an upgrade to its full-year profit outlook.

Robert Stallard, an analyst with Vertical Research Partners, said the earnings report shows sales growth has eased in both commercial and defense businesses.

GE Aerospace now expects deliveries of LEAP engines, which power Airbus and Boeing narrowbody aircraft, to decline 10% this year from a year ago. In July, the company anticipated the deliveries to be flat to up 5% this year.

CEO Larry Culp said the company's efforts to address supply-chain constraints have improved material output from the previous quarter, but added there was more work to do.

"We have very strong demand across the industry," Culp said in an interview. "Both the airlines as they utilize existing fleets, (and) the air framers as they work to help the airlines expand those same fleets are pulling on us and others for more."

Fewer engine deliveries will likely compound the headache for airlines, which are spending billions on repairs to keep flying older, less fuel-efficient jets due to the shortage of newer aircraft.

Airbus was compelled to lower its full-year jet delivery targets in June, blaming delays in deliveries of LEAP engines.

Culp said the company has "a lot of work to do to keep pace" with the European planemaker's plan to raise output of its best-selling A320neo family to 75 jets a month.

He said upgrades to high-pressure turbine blades in LEAP-1A engines, which are used by Airbus, will help in that endeavor. The upgraded blades are expected to be certified "in a matter of weeks," Culp said.

GE Aerospace said a strike by factory workers at Boeing has not had a "significant" impact thus far on its revenue, earnings and cash flows.

The company has started shipping its 9X engines for the U.S. planemaker's new jet 777X. While Boeing has delayed the plane by a year, GE Aerospace said it expects to increase the deliveries for 9X engines next year. Culp, however, said the ramp-up rate would depend on Boeing's needs.

GE Aerospace has a dominant share in the engine market for narrowbody jets and enjoys a strong position in widebodies. More than 70% of its commercial engine revenue comes from parts and services.

A lack of new planes has led to a surge in demand for after-market services.

Strong demand for services as well as price increases have helped GE Aerospace more than offset the impact of lower engine shipments and increase profit.

As a result, the company raised its full-year profit outlook for a third time in seven months. It now expects an adjusted profit of $4.20 per share to $4.35 per share for 2024, compared with its prior forecast of $3.95 to $4.20 per share.

Its adjusted profit for the quarter through September came in at $1.15 per share, compared with $1.14 a share expected by analysts in a LSEG survey.

GE Aerospace reported $8.94 billion in adjusted revenue for the third quarter, compared with $9.02 billion expected by analysts.

GE Aerospace shares were down 8.1% at $178.49 on Tuesday afternoon.

(Reporting by Rajesh Kumar Singh in Chicago and Shivansh Tiwary in Bengaluru; Editing by Chizu Nomiyama, Christina Fincher and Matthew Lewis)