GE Aerospace’s first quarter results were marked by double-digit revenue growth, driven primarily by its services business and robust demand for commercial aviation support. Management highlighted the significant contribution of service orders, which rose 31% year over year, and noted continued momentum in defense programs. CEO Larry Culp pointed to the company’s ability to increase material input at supplier sites and the effectiveness of the FLIGHT DECK operating model as key operational drivers. The quarter also saw margin expansion, attributed to favorable mix and disciplined cost controls. Culp emphasized, “We’re leveraging FLIGHT DECK to tackle supply chain constraints head-on,” reflecting management’s focus on operational efficiency and customer delivery.
Is now the time to buy GE? Find out in our full research report (it’s free).
GE Aerospace (GE) Q1 CY2025 Highlights:
- Revenue: $9.00 billion vs analyst estimates of $9.77 billion (11.5% year-on-year growth, 7.9% miss)
- Adjusted EPS: $1.49 vs analyst estimates of $1.27 (17.3% beat)
- Adjusted EBITDA: $2.45 billion vs analyst estimates of $2.22 billion (27.2% margin, 9.9% beat)
- Management reiterated its full-year Adjusted EPS guidance of $5.28 at the midpoint
- Operating Margin: 23.8%, up from 19.2% in the same quarter last year
- Market Capitalization: $263.3 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions GE Aerospace’s Q1 Earnings Call
- Douglas Harned (Bernstein) asked about GE Aerospace’s advocacy efforts to restore zero-tariff regimes in aviation. CEO Larry Culp explained they are in active dialogue with administration officials and are taking operational actions to mitigate current tariff headwinds, but noted significant uncertainty remains.
- Sheila Kahyaoglu (Jefferies) inquired about margin cadence amid tariffs. CFO Rahul Ghai outlined expectations for continued services-driven profit growth in the second quarter, but embedded caution in second-half guidance due to macroeconomic and tariff uncertainties.
- David Strauss (Barclays) questioned assumptions behind flat second-half flight departures and their impact on shop visits. Culp responded that a conservative outlook was used, with backlog strength and delayed impact from lower departures expected to sustain shop activity through the year.
- Gautam Khanna (TD Cowen) probed on pricing strategies for spare parts to offset tariffs. Ghai described standard catalog price increases planned for later in the year and temporary surcharges as mechanisms to manage cost pass-through without eroding demand.
- Ken Herbert (RBC Capital Markets) asked whether first-quarter spare parts growth was due to pre-buying ahead of tariffs. Ghai clarified that there was no evidence of pre-buy activity and that order growth was consistent with high backlog and ongoing demand trends.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely monitor (1) the pace at which GE Aerospace converts its robust service backlog into realized revenue, (2) the effectiveness of cost controls and pricing actions in offsetting tariff-related headwinds, and (3) ongoing improvements in supplier deliveries and engine output, particularly for LEAP engines. New contract wins and defense program milestones will also be important indicators of sustained growth.
GE Aerospace currently trades at $248.89, up from $178.32 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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