GE Aerospace's Q2 Earnings Report: Buy, Sell, or Fairly Valued?

GE Aerospace's Q2 commercial engines segment revenue grew 30% to $8 billion with a 28% operating margin. Defense revenue and margin were flat, but management raised full-year and 2028 revenue and profit expectations. The company's commitment to process improvements and increasing demand for engine overhauls supports our forecast for continued service margin expansion. We've raised our fair value estimate to $266 per share, but the stock is fairly valued compared to our estimate.

Title: GE Aerospace Q2 2025 Earnings: Strong Commercial Segment Growth and Optimistic Outlook

July 2, 2025

GE Aerospace reported strong second-quarter results, with its commercial engines segment revenue growing by 30% to $8 billion, supported by a robust operating margin of 28% [1]. The company's defense revenue and margin remained flat, but management raised full-year and 2028 revenue and profit expectations, driven by process improvements and increasing demand for engine overhauls [1].

The company's commercial engines segment saw significant growth, with revenue climbing to $8 billion, a 30% increase from the previous quarter. This growth was underpinned by a strong operating margin of 28%, reflecting the company's commitment to process improvements and the increasing demand for engine overhauls [1]. The defense segment, while showing flat revenue and margin, continues to be a stable contributor to the company's overall financial performance.

Management's optimistic outlook is supported by the company's strategic focus on process improvements and the growing demand for engine overhauls. This focus is expected to drive continued service margin expansion, contributing to the company's long-term growth prospects.

In response to the strong performance, the company has raised its fair value estimate to $266 per share. However, the stock is currently fairly valued compared to this estimate, suggesting that investors may need to consider other factors when evaluating the company's stock price.

Overall, GE Aerospace's Q2 2025 earnings report highlights the company's strong performance in the commercial engines segment and its commitment to process improvements and growth. The company's optimistic outlook and strategic focus position it well for continued success in the aerospace industry.

References:
[1] https://leehamnews.com/category/rtx/