GE Aerospace Surges as Fourth-Quarter Results Exceed Expectations

Strong Earnings Propel Stock Higher

GE Aerospace GE shares climbed in premarket trading on Thursday following an impressive report for the fourth quarter. The company announced adjusted revenue of $9.879 billion, representing a 16% year-over-year increase. Total GAAP revenue reached $10.812 billion, effortlessly surpassing analyst expectations of $9.604 billion.

Solid Growth in Key Sectors

Revenue from Commercial Engines & Services grew by 19% year-over-year, totaling $7.650 billion. Meanwhile, Defense & Propulsion Technologies contributed $2.523 billion, reflecting a smaller growth of 4% year-over-year.

Order Book Flourishes

Total orders surged by 46% year-over-year, amounting to $15.5 billion, fueled by a 50% rise in Commercial Engines & Services and a 22% increase in Defense & Propulsion Technologies.

Improved Profitability

During the quarter, GE Aerospace’s adjusted operating profit margin expanded by 450 basis points to 20.1%. The adjusted operating profit hit $1.988 billion, marking a 49% increase compared to the same quarter last year.

Strong Earnings Per Share

Adjusted earnings per share (EPS) stood at $1.32, up 103% year-over-year and comfortably above the consensus estimate of $1.04.

Cash Flow Strength

The company reported operating cash flow of $5.8 billion for the fiscal year, up 26% from the previous period, with adjusted free cash flow also rising by 28%.

Share Repurchases and Dividend Boost

In 2024, GE Aerospace repurchased over $6 billion in shares and plans to expand this program to $7 billion in 2025. Additionally, a 30% increase in the dividend was announced, pending Board approval.

Outlook for 2025

Looking ahead, GE Aerospace projects low double-digit growth in adjusted revenue and EPS between $5.10 and $5.45, slightly below the consensus estimate of $5.22.

The anticipated adjusted operating profit ranges from $7.8 billion to $8.2 billion, while adjusted free cash flow is expected between $6.3 billion and $6.8 billion.

H. Lawrence Culp, Jr., Chairman and CEO of GE Aerospace, expressed confidence in the company’s future, stating, “For 2025, we expect double-digit revenue and EPS growth with greater than 100% free cash flow conversion. Our proprietary FLIGHT DECK model will help us enhance output and serve our customers effectively.”

Investor Opportunities

Investors interested in GE Aerospace can explore opportunities through the TCW Transform Systems ETF NETZ and the iShares U.S. Aerospace & Defense ETF ITA.

Current Stock Performance

As of the latest check Thursday, GE shares are up 8.04% and trading at $203.51 in the premarket.

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