24Q4 revenue was $10.8 billion, up 14% over 23Q4. Commercial Engine & Services (CES) revenue jumped 19% and Defense & Propulsion Technologies (DPT) rose 4.5%. CES segment profit surged 54%, with a 640 bp increase in margin to 28.2%. DPT segment profit rose 3%, as margin slipped 10 bp to 9.6%. Corporate and other costs rose 12.7% to $311 million. Profit from the run-off insurance operations was $481 million, up nearly 5-fold from 23Q4. Other income was $346 million, up from $16 million. The company sold its remaining interest in GE Healthcare.
With all of that, 24Q4 net income was $484 million, more than double 23Q4’s $197 million. GAAP EPS was $1.73, up from $0.72 last year and better than my estimate of $1.25. Non-GAAP adjusted EPS was $1.32, up from $0.65 and ahead of my $1.10. GE Aerospace’s profitability was helped by the insurance gain and also by lower-than-expected deliveries of LEAP engines which earn lower margins than GE’s more mature engines.
Air travel demand rose 10.4% in 2024, according to the IATA, and is now modestly above pre-pandemic levels. The outlook remains positive, but still dependent upon global economic conditions, where the outlook has been clouded by the risks of tariffs and geopolitical conflict. Supply chain disruptions still apparently plague engine manufacturers and airframers. Both Boeing and Airbus anticipate only modest increases in production in 2025.
Management’s 2025 guidance anticipates low double-digit adjusted revenue growth (i.e. excluding run-off insurance operations); operating profit of $7.8-$8.2 billion, up 9.6% at the midpoint; adjusted EPS of $5.10-$5.45 and FCF of $6.3-$6.8 billion, up from $6.1 billion. My projections are in line with that guidance. They anticipate adjusted revenue growth of 12.6%, operating profit of $8.0 billion, GAAP EPS of $5.75, adjusted (non-GAAP) EPS of $5.42 and free cash flow of $6.6 billion. For 2026, I anticipate that GE’s adjusted revenue growth will slow to 9.7% from 12.6%. With further modest margin expansion, my model shows 2026 GAAP EPS of $6.61, up 15% from 2025, and non-GAAP EPS of $6.26, up 15.5%, and free cash flow of $7.2 billion, up 9%.
The stock fell 4.3% on Friday (2/21) in a broad market sell-off. A quick look at the chart suggests their may be more to come after its 33% two-month advance. Based upon management’s guidance and my 2026 projections, I am raising my price target from $180.00 to $200.00, which is just above Friday’s closing price of $199.83. Thus, I am maintaining my performance rating of “3” (Neutral) on the stock.
While GE Aerospace’s near-term growth prospects appear to be solid, owing in large part to its strong backlog, the stock’s high forward valuation at 35 times projected 2025 GAAP EPS and 30 times adjusted (non-GAAP) EPS implies market expectations of mid-teens earnings growth throughout the forecast period and beyond. The key question is whether this growth can continue in 2027 and beyond.
This is a summary of my recent update report on GE Aerospace (GE). To obtain a copy of the report, please reach out to me using the contact information provided below:
March 13, 2025 (Report published on February 21, 2025.)
Stephen P. Percoco
Lark Research
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Linden, New Jersey 07036
(908) 975-0250
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© 2015-2025 by Stephen P. Percoco, Lark Research. All rights reserved.
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