General Electric's 2025 Q2 Earnings Call: Contradictions in Growth Assumptions, Supply Chains, and Profitability

Departure growth assumptions, supply chain and inflation management, customer behavior and economic environment, LEAP profitability and growth expectations, and supply chain and demand outlook are the key contradictions discussed in General Electric's latest 2025Q2 earnings call.



Revenue and Profit Growth:
- GE Aerospace reported revenue of over $10 billion for Q2 2025, up 23% year-over-year, with a significant improvement in operating profit, up over $400 million or 23%.
- The growth was driven by strong demand for both services and equipment, particularly in commercial and defense sectors.

Commercial Services Performance:
- Commercial Services (CES) revenue was up 29%, with service volume contributing significantly to the growth, alongside a 28% rise in orders and 35% in equipment revenue.
- This was due to robust demand in narrow-body and wide-body platforms, and an increase in shop visits for engines like CFM56 and LEAP.

Defense and Propulsion Technologies (DPT):
- DPT reported revenue growth of 7%, with a defense book-to-bill ratio of 1.2x, and a 5% increase in profit despite a challenging comparison.
- The results were supported by strong defense orders and the contribution of international defense shipments.

Supply Chain and Operational Excellence:
- GE Aerospace achieved 10% sequential improvement in material input from priority suppliers, leading to higher inventory and output.
- The improvement was driven by FLIGHT DECK, a lean operating model, and enhanced collaboration with suppliers, resulting in better productivity and reduced work in progress.