GE Aerospace 2025 Q2 Earnings Beats Expectations with Net Income Up 59.4%

GE Aerospace (GE), ranking 34th by market capitalization, reported its fiscal 2025 Q2 earnings on Jul 17th, 2025. The company exceeded analysts' expectations, with revenue rising 21% to $11.02 billion, surpassing the $9.59 billion forecast, and earnings per share (EPS) at $1.66, beating the expected $1.43. Following the strong results, GE Aerospace raised its guidance for 2025, anticipating adjusted EPS between $5.60 and $5.80, reflecting over 20% growth year-over-year.

Revenue

The total revenue of GE Aerospace increased by 21.2% to $11.02 billion in 2025 Q2, up from $9.09 billion in 2024 Q2. Equipment sales contributed $2.84 billion, while services generated $7.31 billion. Insurance revenue added $872 million, culminating in the total revenue figure of $11.02 billion.

Earnings/Net Income

GE Aerospace's EPS rose 64.7% to $1.91 in 2025 Q2 from $1.16 in 2024 Q2, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $2.02 billion in 2025 Q2, marking 59.4% growth from $1.27 billion in 2024 Q2. The EPS results are strong, indicating robust performance.

Post-Earnings Price Action Review

The strategy of buying GE Aerospace shares 30 days after a quarterly earnings report with a raised revenue forecast over the past three years delivered strong returns. This approach achieved a remarkable 713.70% return, significantly outperforming the benchmark return of 84.77%. The excess return of 628.93% highlights the strategy's effectiveness compared to a traditional buy-and-hold method. The Sharpe ratio of 1.52 reflects impressive risk-adjusted returns, while the maximum drawdown of 0.00% demonstrates the strategy's ability to preserve capital during market downturns. This performance underscores the potential benefits of a strategic investment approach focused on post-earnings announcements, particularly when revenue forecasts are raised.

CEO Commentary

H. Lawrence Culp, Chairman & CEO, emphasized that GE Aerospace is driven by its purpose of ensuring safe flight, highlighting a strong performance with a $175 billion backlog. He noted a significant revenue growth of 13% in 2024, driven by robust demand in services, which contribute about 70% of total revenue. Culp acknowledged the importance of safety and quality as foundational principles, stating, "Everyone at GE Aerospace owns safety, and we never compete on safety." He expressed confidence in the company's long-term positioning, citing a favorable outlook for growth in both commercial and defense sectors, while maintaining a cautious approach to near-term demand fluctuations.

Guidance

The company raised its outlook for 2025, expecting total revenue growth in the mid-teens, with adjusted EPS projected between $5.60 and $5.80, reflecting over 20% growth year-over-year. For 2028, GE Aerospace anticipates adjusted revenue growth at a double-digit compounded rate, operating profit reaching approximately $11.5 billion, and free cash flow of at least $8.5 billion, with conversion around 100%. The guidance incorporates expectations of strong performance in services and equipment, alongside continued investments in capacity and technology advancements.

Additional News

GE Aerospace recently announced significant strategic developments, including securing a historic engine deal with Qatar Airways for over 400 GE9X and GEnx engines. This marks the largest widebody engine agreement in the company's history. Additionally, GE Aerospace plans to increase capital return to shareholders by 20% from 2024 to 2026, targeting an estimated $24 billion, and intends to return at least 70% of free cash flow via dividends and buybacks beyond 2026. Furthermore, the company has completed over 350 tests for its CFM RISE program, focusing on advancing new high-pressure turbine blade cooling technology, which underscores its commitment to innovation and technical excellence in aerospace propulsion.