General Electric Company, doing business as GE Aerospace, designs and produces commercial and defense aircraft engines, integrated engine components, electric power, and mechanical aircraft systems. It also offers aftermarket services to support its products. The company operates in the United States, Europe, China, Asia, the Americas, the Middle East, and Africa.
General Electric (GE) Aerospace delivered a stellar fourth-quarter earnings report, surpassing Wall Street expectations and driving a notable 6.6% surge in its share price, outperforming the S&P 500’s modest 0.53% gain. The company’s adjusted earnings per share (EPS) of $1.32 exceeded the consensus estimate of $1.04, reflecting significant operational improvements and robust demand across its commercial and defence segments.
Revenue grew 16% year-on-year to $9.88 billion, with commercial engines and services contributing $7.65 billion, surpassing forecasts of $7.35 billion. Defence and propulsion technologies added $2.52 billion, slightly ahead of expectations. Free cash flow (FCF) jumped 21% year-on-year to $1.52 billion, underscoring GE’s ability to convert growth into liquidity.
Key highlights included the announcement of a $7 billion share buyback program and a planned 30% dividend increase, signalling confidence in long-term profitability. For 2025, GE Aerospace anticipates adjusted EPS between $5.10 and $5.45, alongside projected free cash flow of up to $6.8 billion. These metrics align with a commitment to double-digit revenue and earnings growth while maintaining over 100% cash flow conversion.
Despite ongoing supply-chain challenges and reduced new-engine deliveries from major customer Boeing, GE Aerospace leveraged its maintenance backlog to sustain margin growth. Operating margins in commercial engines and services climbed approximately 500 basis points year-on-year, buoyed by high-margin spare parts demand and favourable pricing. Defence revenue also rose, supported by steady maintenance activity amid heightened global conflicts.
CEO Larry Culp highlighted the company’s focus on domestic production, innovation, and national security as pivotal growth drivers, complemented by ongoing debt reduction efforts. GE Aerospace’s debt has declined to $20 billion from over $100 billion in 2018, positioning the company for a potential ratings upgrade.
Looking ahead, GE’s outlook remains strong, supported by higher aircraft deliveries from Boeing and Airbus and the sustained demand for its CFM56 engine maintenance services. Additionally, advancements in hypersonic propulsion technologies signal promising future opportunities.
In response to the robust results, GE Aerospace shares rose 6.60%, reflecting investor confidence in the company’s outlook. With a sharpened focus on aviation and operational excellence, GE Aerospace is well-positioned for the future. As a reminder, GE’s inclusion in the US Growth and US Momentum portfolios is based on relative share price performance. Given the price has risen strongly in January, as is up 95.08% over the prior 12-months, we do not envisage the stock being removed from either portfolio when they are next rebalanced on February 3rd 2025.
