GE Aerospace's Q4 2024 Earnings: A Strong Finish to the Year

GE Aerospace, the standalone company formed after General Electric's (GE) spin-off, reported a strong finish to 2024 with robust Q4 results. The company's performance was driven by a 46% increase in orders, a 16% rise in revenue, and a 49% jump in profit, leading to a 450 basis point expansion in margins. GE Aerospace's earnings per share (EPS) more than doubled to $1.32, while free cash flow increased by 21% to $1.5 billion.

The company's strong performance was fueled by robust demand for services and equipment, as well as a favorable mix and price. GE Aerospace's free cash flow growth was driven by higher earnings and improved working capital, with accounts receivables increasing but day sales outstanding down five days year over year. The company's growth was also supported by its ability to navigate supply chain constraints, with material input improving by 26% across priority supplier sites in the second half of the year.



GE Aerospace's management effectively tackled supply chain constraints by improving material input, leveraging its proprietary lean operating model (FLIGHT DECK), addressing inventory management, focusing on services and equipment, and investing in the future. The company's ability to generate significant growth across key metrics, both in the quarter and the year, demonstrates its resilience and adaptability in the face of ongoing material availability challenges.

Looking ahead, GE Aerospace expects double-digit revenue and EPS growth with greater than 100% free cash flow conversion in 2025. The company's strong financial performance, including low-double-digit adjusted revenue growth and adjusted EPS growth, allows it to invest in its business and navigate potential supply chain challenges. GE Aerospace's management is confident in its ability to accelerate output and deliver for customers, further addressing supply chain constraints.

In conclusion, GE Aerospace's strong Q4 2024 performance, particularly in orders and revenue growth, reflects the company's strategic initiatives and market demand. The company's significant profit growth and margin expansion were driven by strong demand, favorable mix and price, reduced tax rate, improved working capital, and growth in both CES and DPT segments. GE Aerospace's management effectively navigated supply chain constraints, and the company is well-positioned to deliver further growth in the future.