In This Article:
-
Revenue Growth: Up 16% in Q4, with double-digit growth in services and equipment.
-
Profit Increase: Up nearly 50% in Q4, with full-year profit up 30% to $7.3 billion.
-
Free Cash Flow: Up 21% in Q4 to $1.5 billion; full-year free cash flow up almost 30% to $6.1 billion.
-
Orders Growth: Up 46% in Q4, with significant demand for both services and equipment.
-
Margins: Expanded 450 basis points to 20.1% in Q4; full-year margins expanded 330 basis points to 20.7%.
-
Earnings Per Share (EPS): Q4 EPS of $1.32, more than doubled; full-year EPS increased 56% to $4.60.
-
Commercial Engines & Services (CES) Revenue: Up 19% in Q4; full-year revenue up 13%.
-
Defense & Propulsion Technologies (DPT) Revenue: Up 6% for the full year.
-
LEAP Engine Deliveries: Down 5% in Q4; full-year deliveries down 10%.
-
2025 Profit Guidance: Expected in the range of $7.8 billion to $8.2 billion.
-
2025 Free Cash Flow Guidance: Expected to generate $6.3 billion to $6.8 billion.
-
Share Repurchases: Increasing to $7 billion in 2025.
-
Dividend Increase: Planning to raise by 30%, subject to Board approval.
Release Date: January 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
GE Aerospace (NYSE:GE) reported a strong financial performance in 2024, with revenue up double digits, profit up $1.7 billion, and free cash flow up $1.3 billion.
-
The company achieved significant commercial momentum, signing key services agreements and receiving orders for over 4,600 commercial and defense engines.
-
GE Aerospace (NYSE:GE) launched FLIGHT DECK, a lean operating model, to enhance safety, quality, delivery, and cost efficiency.
-
The LEAP-1A HPT durability kit was certified, expected to double LEAP time on wing and improve production efficiency.
-
GE Aerospace (NYSE:GE) plans to increase share repurchases to $7 billion and raise its dividend by 30%, reflecting a strong balance sheet and commitment to shareholder returns.
Negative Points
-
Supply chain constraints impacted total deliveries, with LEAP deliveries down 5% in the fourth quarter.
-
Internal shop visit volume was lower than expected due to material constraints, affecting CES services revenue.
-
The company faces ongoing challenges with 15 critical suppliers, requiring significant internal resources to address.
-
Despite improvements, inventory levels increased due to material availability challenges.
-
The GE9X engine program is expected to be a headwind in 2025, with increased shipments impacting profitability.
Q & A Highlights
Q: Can you refresh us on what the 2025 guide is assuming with respect to LEAP OE profitability? Will LEAP OE become a profit center over time? A: LEAP services became profitable in 2024, and the program is expected to break even in 2025, with OE following in 2026. The profitability trajectory is improving due to higher external spare parts volume, better pricing, and operational efficiencies. The program is on track to reach CFM56 levels by 2028.