GE Aerospace reported fourth‑quarter 2025 results that surpassed consensus estimates, with GAAP revenue of $12.72 billion and adjusted earnings per share of $1.57. The company’s revenue grew 18% year‑over‑year, while adjusted EPS rose 19% from $1.32 in the same quarter a year earlier, reflecting a 38% increase in full‑year adjusted EPS.
Revenue growth was driven by a 24% jump in the Commercial Engines & Services (CES) segment, the core of GE Aerospace’s high‑margin business. CES services revenue surged 28% as the company’s $190 billion backlog of maintenance and spare‑parts work continued to expand, while commercial engine deliveries, particularly LEAP engines, accelerated to record levels.
Operating profit for the quarter reached $2.30 billion, a 14% increase from $2.00 billion in Q4 2024, and the operating margin climbed to 19.2% from 17.9% year‑ago. The margin expansion was largely due to higher mix of high‑margin services and improved operational leverage, offsetting modest cost inflation in parts and labor.
Free cash flow generated $1.80 billion, up 15% from $1.55 billion in the prior year, underscoring the company’s ability to convert operating cash into liquidity. The cash‑flow conversion rate improved to 95% of operating cash flow, a key metric for investors assessing the sustainability of earnings.
Management reiterated a high‑teens revenue growth outlook for 2026 and raised its operating‑profit guidance to $8.65 billion–$8.85 billion for the full year. Adjusted EPS guidance for FY 2026 was set at $7.10–$7.40, a midpoint of $7.25, reflecting confidence in continued execution of the FLIGHT DECK operating model and the LEAP services profitability trajectory.
Despite the earnings beat, GE Aerospace shares fell 3–6% in early trading. Analysts cited a moderation in revenue growth expectations for 2026—from nearly 24% in 2025 to low‑double‑digit rates—and potential margin pressures. Headwinds highlighted include the 9X engine program, equipment growth that may outpace services, and normalization of spare‑engine demand.
"With a strong fourth quarter, GE Aerospace delivered an outstanding year as revenue grew 21%, EPS was up 38%, and free cash flow conversion exceeded 100%," said Chairman and CEO H. Lawrence Culp, Jr. He added that the company’s $190 billion backlog and the expansion of the LEAP engine program position GE Aerospace for continued value creation.
GE Aerospace’s transformation into a services‑centric business is reinforced by its large installed base of roughly 70,000 commercial and military engines. The company’s FLIGHT DECK operating model, which aligns production and service delivery, has driven cost efficiencies and higher margin mix, while the LEAP engine’s record shipments—up 28% year‑over‑year—fuel future revenue growth.
In summary, GE Aerospace’s Q4 2025 results demonstrate robust execution and a strong backlog, but the market’s cautious reaction reflects concerns about a slowing growth trajectory and margin headwinds in 2026. The company’s strategic focus on services, coupled with its sizable installed base, remains a solid foundation for long‑term value creation.
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