It has been about a month since the last earnings report for GE Aerospace (GE). Shares have added about 1% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is GE due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for GE Aerospace before we dive into how investors and analysts have reacted as of late.
GE Aerospace Q3 Earnings & Revenues Surpass Estimates, Increase Y/Y
GE Aerospace reported third-quarter 2025 results, wherein both revenues and earnings surpassed the Zacks Consensus Estimate.
It is worth noting that in April 2024, GE Aerospace emerged as a separate public company, following the spin-off of GE Vernova Inc. from General Electric.
Inside The Headlines
The company’s third-quarter adjusted earnings were $1.66 per share, which beat the Zacks Consensus Estimate of $1.46. The bottom line surged 44% year over year.
Total revenues were $12.2 billion, indicating a year-over-year increase of 24%. Total orders grew 2% on a year-over-year basis to $12.8 billion.
Adjusted revenues were $11.3 billion, marking a year-over-year increase of 26%. The metric beat the consensus estimate of $10.3 billion.
Segmental Discussion
Revenues from the company’s Commercial Engines & Services business jumped 27% year over year to $8.88 billion. The Zacks Consensus Estimate for the business’ revenues was pegged at $8.25 billion. The results were driven by higher shop visit work scope, increased revenues from spare parts and equipment and favorable pricing. Total orders in the segment rose 5% year over year to $10.3 billion.
The Defense & Propulsion Technologies segment’s revenues totaled $2.83 billion, up 26% year over year. The Zacks Consensus Estimate for the segment’s revenues was pegged at $2.52 billion. Results benefited from the strong momentum in the Defense & Systems and Propulsion & Additive Technologies businesses. Total orders in the segment decreased 5% year over year to $2.9 billion owing to timing issues across quarters.
Margin Profile
GE Aerospace’s cost of sales (comprising costs of equipment and services sold) surged 24.7% year over year at $7.76 billion. Selling, general and administrative expenses decreased 10.2% year over year to $1.2 billion. Research and development expenses totaled $415 million, reflecting a year-over-year rise of 25.4%.
GE Aerospace’s operating profit (non-GAAP) was $2.3 billion, up 26.5% year over year. The margin was 20.3%, relatively stable year over year.
GE Aerospace’s Balance Sheet & Cash Flow
Exiting the third quarter of 2025, GE Aerospace had cash, cash equivalents and restricted cash of $12.5 billion compared with $13.6 billion at the end of December 2024. The company’s long-term borrowings were $18.8 billion compared with $17.2 billion at the end of December 2024.
In the third quarter, the adjusted free cash flow was $2.36 billion compared with $1.82 billion in the year-ago quarter.
In the same quarter, it rewarded its shareholders with a dividend payment of $0.4 billion. The company repurchased shares for approximately $1.8 billion during the same period.
Outlook
For 2025, GE expects adjusted revenues to grow in the high-teens range from the year-ago period's actual. Operating profit is estimated to be in the band of $8.65-$8.85 billion. Adjusted earnings are predicted to be in the range of $6.00-$6.20 per share. The free cash flow is anticipated to be in the band of $7.1-$7.3 billion, with the conversion rate projected to be more than 100%.
GE Aerospace expects the Commercial Engines & Services segment’s revenues to grow in the low twenties range, whereas operating profit is anticipated to be in the band of $8.45-$8.65 billion. For the Defense & Propulsion Technologies segment, revenues are projected to increase in the high-single-digit range, whereas operating profit is anticipated to be in the band of $1.2-$1.3 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
The consensus estimate has shifted 6.14% due to these changes.
VGM Scores
Currently, GE has a nice Growth Score of B, a score with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
GE has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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GE Aerospace (GE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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