Positive Q4 for GE Aerospace: Earnings Beat and Growth Ahead

GE Aerospace Reports Strong Fourth Quarter Performance

GE Aerospace has recently announced impressive results for its fourth quarter, showcasing a significant growth trajectory. The company reported an adjusted revenue growth of 16% year-over-year, reaching an impressive $9.879 billion. Additionally, their GAAP revenue stood at $10.812 billion, surpassing analyst expectations that had set the bar at $9.604 billion.

Key Revenue Highlights

In the breakdown of revenues, the Commercial Engines & Services sector generated $7.650 billion, marking a 19% increase compared to the previous year. The Defense & Propulsion Technologies division also contributed positively, yielding $2.523 billion, which represents a 4% year-over-year growth.

Surge in Orders and Profit Margins

The demand for GE Aerospace products has surged, with total orders climbing by 46% year-over-year to reach $15.5 billion. Notably, the Commercial Engines & Services segment saw a remarkable 50% increase in orders, while Defense & Propulsion Technologies experienced a solid 22% boost.

Operating Profit and Earnings Per Share

GE Aerospace not only increased its revenue but also enhanced its operational efficiency, reflected in the adjusted operating profit margin, which grew by 450 basis points to 20.1%. The adjusted operating profit for the quarter soared to $1.988 billion, marking a 49% increase. Additionally, adjusted earnings per share (EPS) climbed to $1.32, which more than doubled from the previous year, exceeding the consensus estimate of $1.04 by a notable margin.

Strong Cash Flow and Shareholder Returns

Highlighting its financial strength, GE Aerospace reported cash from operating activities for the fiscal year at $5.8 billion, which is up by 26% from the prior year. The adjusted free cash flow also saw an impressive rise of 28%. In a bid to enhance shareholder value, the company repurchased over $6 billion worth of shares throughout 2024 and announced an ambitious $7 billion share repurchase plan for 2025. Furthermore, they are considering a 30% increase in dividend payouts, pending Board approval.

Outlook for Fiscal Year 2025

Looking ahead, GE Aerospace has set optimistic guidance for 2025. The company anticipates an adjusted revenue growth within the low double digits and expects adjusted EPS to range between $5.10 and $5.45, slightly below the consensus estimate of $5.22. They forecast an adjusted operating profit in the range of $7.8 billion to $8.2 billion, alongside anticipated adjusted free cash flow of $6.3 billion to $6.8 billion.

CEO Insights on Future Growth

CEO H. Lawrence Culp, Jr. expressed confidence in the company's future, stating, “Looking to 2025, we expect double-digit revenue and EPS growth with greater than 100% free cash flow conversion. Guided by FLIGHT DECK, our proprietary lean operating model, I’m confident in our ability to accelerate output and deliver for our customers.” His message highlights the commitment to driving value and performance.

Investment Opportunities

For those interested in gaining exposure to GE Aerospace, there are options available, including the TCW Transform Systems ETF as well as the iShares U.S. Aerospace & Defense ETF. These platforms provide investors with opportunities to tap into the aerospace sector's potential.

Current Stock Performance

After the announcement of the fourth-quarter results, GE Aerospace shares saw a positive uptick, currently trading up 8.04% at $203.51 premarket.

Frequently Asked Questions

What were GE Aerospace's fourth-quarter earnings?

GE Aerospace reported adjusted earnings of $1.32 per share, exceeding forecasts of $1.04.

How much revenue did GE Aerospace generate in Q4?

The company generated $9.879 billion in adjusted revenue, a 16% increase year-over-year.

What is the share repurchase plan for 2025?

GE Aerospace announced a $7 billion share repurchase plan for the year 2025.

What is the growth outlook for GE Aerospace in 2025?

The company anticipates low double-digit revenue growth with an adjusted EPS forecast between $5.10 and $5.45.

Which ETFs can investors use to invest in GE Aerospace?

Investors can consider the TCW Transform Systems ETF and the iShares U.S. Aerospace & Defense ETF to invest in GE Aerospace.

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