In This Article:
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Orders Growth: Up 12%.
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Revenue Growth: Up 11%.
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Profit: $2.1 billion, up 38%.
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Margins: 23.8%.
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Earnings Per Share (EPS): $1.49, up 60% year over year.
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Free Cash Flow: $1.4 billion.
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Commercial Engines & Services Revenue Growth: Up 17%.
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Defense Units Growth: Up 5%.
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Defense Profit Growth: Up 16%.
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R&D Spending: Approximately $3 billion annually.
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Backlog: Over $170 billion.
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Commercial Services Backlog: Over $140 billion.
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Spare Parts Revenue Growth: Up more than 20%.
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Internal Shop Visit Revenue Growth: Up 11%.
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LEAP External Shop Visits Growth: Over 60%.
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Guidance for 2025: Revenue growth low double-digit, profit $7.8 billion to $8.2 billion, EPS $5.10 to $5.45, free cash flow $6.3 billion to $6.8 billion.
Release Date: April 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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GE Aerospace (NYSE:GE) reported a strong start to 2025 with orders up 12% and revenue growing 11%, driven by double-digit growth in both services and equipment.
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The company achieved a significant profit increase of 38% to $2.1 billion, leading to expanded margins of 23.8%.
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Commercial Engines & Services (CES) saw a 31% increase in orders and a 17% rise in revenue, contributing to a 35% growth in operating profit year over year.
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Defense & Propulsion Technologies (DPT) experienced a solid quarter with defense units growing 5% and profit increasing 16%.
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GE Aerospace (NYSE:GE) is investing $1 billion in US manufacturing and hiring over 5,000 US workers, supporting domestic manufacturing revitalization efforts.
Negative Points
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Heightened tariffs are expected to result in additional costs, with GE Aerospace (NYSE:GE) estimating a $500 million impact despite efforts to mitigate it.
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Spare parts delinquency has increased over two times year over year, indicating challenges in converting orders to revenue due to supply chain dynamics.
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The company is taking a cautious approach with a slower second half expected, resulting in departures up low-single digits for the full year.
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Total engine units were down 6%, with LEAP engine deliveries down 13%, attributed to a slower start to material inputs.
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The macroeconomic backdrop remains uncertain, with potential impacts from tariffs, a slowdown in airframer delivery schedules, and a global recession not factored into the guidance.
Q & A Highlights
Q: Can you comment on the interactions with the administration regarding tariffs and how this might play out over time? A: H. Lawrence Culp, CEO, explained that GE Aerospace has been advocating for a return to a zero-tariff regime, emphasizing the $75 billion trade surplus the sector enjoys due to this approach. While there are many potential scenarios, the company is preparing for a $500 million headwind in 2025 due to tariffs and is taking cost control and pricing actions to mitigate this impact.