Financial Data and Key Metrics Changes - In Q2 2025, GE Aerospace reported a revenue increase of 23% year-over-year, exceeding $10 billion, with orders up 27% [41] - Profit reached $2.3 billion, a 23% increase, driven by services volume and price, resulting in margins of 23% [41] - EPS was $1.66, up 38% from the previous year, supported by a favorable tax rate and lower interest expenses [41] - Free cash flow nearly doubled to $2.1 billion compared to last year [41] Business Line Data and Key Metrics Changes - The Commercial Engines and Services (CES) segment grew revenue by 30%, with service revenue up 29% and equipment revenue up 35% [41][43] - The Defense and Propulsion Technologies (DPT) segment saw a revenue increase of 7%, with profit up 5% [41][45] - CES margins expanded by 50 basis points to 27.9%, while DPT margins declined by 20 basis points to 14.1% [41][45] Market Data and Key Metrics Changes - Departures grew nearly 4% in Q2 2025, aligning with expectations, with a conservative outlook for low single-digit growth in the second half of the year [13] - The commercial services backlog increased to over $140 billion, supporting future growth [14] - Air traffic growth is expected to outpace global GDP, particularly in Asia Pacific and the Middle East [15] Company Strategy and Development Direction - GE Aerospace aims to ramp up services and equipment to support customer fleets while fulfilling strong demand for new engines [16] - The company is investing over $1 billion in MRO and component repair facilities over the next five years to expand capacity [21] - GE Aerospace is focused on enhancing engine performance through technological advancements and operational improvements [17][26] Management's Comments on Operating Environment and Future Outlook - Management raised the 2025 guidance across all metrics, expecting total revenue growth in the mid-teens, up from low double digits [46] - The company anticipates strong adjusted revenue growth at a double-digit compounded rate through 2028, driven by robust demand for services and equipment [39] - Management expressed optimism about the long-term market growth, projecting a mid-single-digit compounded growth rate through 2028 [15] Other Important Information - GE Aerospace's R&D investment is approximately $3 billion in 2025, representing 6-8% of revenue [26] - The company has a strong competitive advantage with the world's largest installed base of engines, accumulating over 2.3 billion flight hours [26] - GE Aerospace plans to return over $24 billion to shareholders between 2024 and 2026, including $19 billion in buybacks [70] Q&A Session Summary Question: Concerns about second half EBIT guidance - Management explained that the second half EBIT guidance reflects a conservative approach, considering expected headwinds from GE9X shipments and corporate expenses [77][81] Question: Pricing assumptions and retirement rates - Management clarified that pricing is expected to offset inflation, with mid-single-digit pricing dynamics anticipated [88] - Regarding retirement rates, management noted that as the fleet ages, retirements are expected to increase, aligning with new aircraft deliveries and departure growth [92][93]

Group 1 - GE Aerospace raised its full-year financial outlook and reported second-quarter profits exceeding Wall Street expectations due to a rebound in aviation market demand, alleviating the impact of the global trade war [1] - The second-quarter revenue for GE Aerospace was $10.2 billion, a year-on-year increase of 24.1%, surpassing market expectations by $640 million; adjusted earnings per share for the second quarter were $1.66, exceeding expectations by $0.23 [1] - The company expects adjusted earnings per share for 2025 to be between $5.60 and $5.80, up from the previous forecast of no more than $5.45 [1] Group 2 - GE Aerospace anticipates revenue growth of around 15%, higher than the market's general expectation of 12.72%; the company also raised its guidance for 2025 and outlook for 2028, including achieving approximately $11.5 billion in operating profit and about $8.5 billion in free cash flow by 2028, both exceeding previous 2024 investor day projections by $1.5 billion [1] - The company is benefiting from a surge in orders, with commercial business revenue growing by 30% in the last quarter, including a historic deal to sell over 400 engines to Qatar Airways [1] - The aerospace industry is facing uncertainties due to U.S. President Trump's tariff policies, which industry leaders claim may increase costs and disrupt supply chains [1] Group 3 - The company recently received approval to resume engine deliveries to Chinese aircraft manufacturer COMAC [3] - After completing the spin-off of its energy and healthcare businesses, GE Aerospace has become an independent company [3]

Financial Performance - GE Aerospace reported adjusted revenue of $102 billion, a 23% year-over-year increase in Q2 2025[54] - The company's operating profit reached $23 billion, also a 23% increase compared to the previous year[54] - Free cash flow surged to $21 billion, a significant 92% increase year-over-year[54] - Adjusted EPS increased by 38% year-over-year, reaching $166[54] - Orders increased by 27% year-over-year, totaling $142 billion[54] Guidance and Outlook - GE Aerospace is raising its 2025 adjusted revenue growth guidance to mid-teens, up from low double-digit[55] - The company expects its 2028 operating profit to reach approximately $115 billion, an increase of $15 billion from the prior outlook[57] - GE Aerospace anticipates a free cash flow of approximately $85 billion in 2028, also a $15 billion increase from the previous forecast[57] Commercial Engines & Services (CES) - Commercial Engines & Services reported a 29% year-over-year increase in services revenue for Q2 2025[32] - Equipment revenue for CES increased by 35% year-over-year[105] - The company expects double-digit revenue growth in commercial services[62] Defense & Propulsion Technologies (DPT) - Defense & Propulsion Technologies revenue increased by 7% year-over-year in Q2 2025[108] - The U S Air Force awarded a $5 billion contract for F110 engines[37]

Group 1 - The CEO of General Electric Aviation stated that the company cannot fully offset the pressure from tariffs on its own [1] - The company is currently in communication with airlines regarding the tariff impacts [1]

Core Insights - General Electric Aviation's CEO announced progress in reducing tariff costs [1] Summary by Categories - **Company Developments** - The CEO highlighted advancements made by the company in lowering tariff expenses [1]

General Electric boosts its full-year financial guidance and tops Wall Street’s profit estimates for the second quarter https://t.co/xIY4e6Jj4y ...

Group 1 - General Electric's aviation business raised its profit forecast for 2025, leading to a pre-market stock price increase of over 2% [1]

[Overview and Highlights](index=1&type=section&id=GE%20AEROSPACE%20ANNOUNCES%20INVESTOR%20UPDATE%20AND%20SECOND%20QUARTER%202025%20RESULTS) GE Aerospace reported strong Q2 2025 performance with significant growth across key metrics and an increased capital return plan, alongside an improved operational outlook [Q2 2025 Performance and Strategic Highlights](index=1&type=section&id=Recent%20highlights%20include%3A) GE Aerospace achieved excellent Q2 2025 results with significant growth in key metrics, increased capital returns, and improved operational output, securing major engine deals - CEO H. Lawrence Culp, Jr. highlighted an excellent second quarter, with **free cash flow nearly doubling** and **over 20% growth in orders, revenue, operating profit, and EPS**[2](index=2&type=chunk) Q2 2025 Key Financial Metrics | Metric | Q2 2025 Result | YoY Growth | | :--- | :--- | :--- | | Total Revenue (GAAP) | $11.0B | +21% | | Adjusted Revenue* | $10.2B | +23% | | Continuing EPS (GAAP) | $1.87 | +56% | | Adjusted EPS* | $1.66 | +38% | | Free Cash Flow* | $2.1B | +92% | - The company plans to increase capital returns to shareholders by **20% to ~$24 billion** between 2024 and 2026, and sustain returning at least **70% of free cash flow** thereafter[6](index=6&type=chunk) - Operational improvements via the FLIGHT DECK initiative led to a **10% sequential improvement in material input** at priority supplier sites, contributing to a **45% YoY increase in total engine unit output**[7](index=7&type=chunk) - Secured the **largest widebody engine deal in company history** with Qatar Airways for over **400 GE9X and GEnx engines**, and another deal with IAG for **32 GEnx-powered Boeing 787s**[7](index=7&type=chunk) [Updated Financial Outlook (2025 & 2028)](index=1&type=section&id=Financial%20outlook%3A) GE Aerospace raised its 2025 guidance and 2028 outlook, projecting higher operating profit and free cash flow due to strong performance Financial Outlook Summary | | 2025 Guidance (as of July 17, 2025) | 2028 Outlook (as of July 17, 2025) | | :--- | :--- | :--- | | Adjusted revenue* growth | Mid-teens | Double-digit CAGR '24-'28 | | Operating profit* | $8.2 - $8.5 billion | ~$11.5 billion | | Adjusted EPS* | $5.60 - $5.80 | ~$8.40 | | Free cash flow* | $6.5 - $6.9 billion | ~$8.5 billion | - The updated 2028 outlook represents a **$1.5 billion increase** in both operating profit and free cash flow compared to the outlook provided at the 2024 Investor Day[6](index=6&type=chunk) [Financial Performance](index=2&type=section&id=Total%20Company%20Results) GE Aerospace demonstrated strong financial performance in Q2 2025 and the first half of 2025, driven by robust growth in both consolidated results and segment-specific contributions [Consolidated Financial Results](index=2&type=section&id=Total%20Company%20Results) GE Aerospace reported strong Q2 2025 consolidated results with significant increases in revenue, operating profit, and free cash flow Q2 2025 Consolidated Non-GAAP Financials | Metric (Non-GAAP) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Adjusted Revenue | $10.15B | $8.22B | +23% | | Operating Profit | $2.34B | $1.90B | +23% | | Adjusted EPS | $1.66 | $1.20 | +38% | | Free Cash Flow (FCF) | $2.11B | $1.10B | +92% | H1 2025 Consolidated Non-GAAP Financials | Metric (Non-GAAP) | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Adjusted Revenue | $19.15B | $16.30B | +18% | | Operating Profit | $4.48B | $3.45B | +30% | | Adjusted EPS | $3.14 | $2.13 | +47% | | Free Cash Flow (FCF) | $3.55B | $2.77B | +28% | [Segment Performance](index=2&type=section&id=Results%20and%20Outlook%20by%20Reporting%20Segment) Commercial Engines & Services and Defense & Propulsion Technologies segments drove Q2 2025 growth with strong revenue and profit increases Commercial Engines & Services (CES) - Q2 2025 | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Orders | $11.7B | +28% | | Revenue | $8.0B | +30% | | Operating Profit | $2.2B | +33% | - CES growth was driven by a **29% increase in services revenue** (spare parts and shop visits) and a **35% increase in equipment revenue**; the segment now expects **high-teens revenue growth** for the full year 2025[12](index=12&type=chunk)[13](index=13&type=chunk) Defense & Propulsion Technologies (DPT) - Q2 2025 | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Orders | $2.9B | +24% | | Revenue | $2.6B | +7% | | Operating Profit | $362M | +5% | - DPT growth was driven by higher units and price in Defense & Systems and growth across all businesses in Propulsion & Additive Technologies; the segment maintains its outlook for **mid-to-high single-digit revenue growth** in 2025[13](index=13&type=chunk)[14](index=14&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) This section presents the unaudited consolidated financial statements, including the Statement of Operations and Statement of Financial Position, reflecting the company's financial performance and position [Statement of Operations (Unaudited)](index=3&type=section&id=STATEMENT%20OF%20OPERATIONS%20%28UNAUDITED%29) Q2 2025 saw total revenues increase 21% to $11.0 billion, with net income attributable to the company growing 60% to $2.03 billion Q2 2025 Statement of Operations Summary | (In millions) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $11.02B | $9.09B | +21% | | Net Income from Continuing Operations | $2.00B | $1.32B | +51% | | Net Income Attributable to Company | $2.03B | $1.27B | +60% | | Diluted EPS from Continuing Operations | $1.87 | $1.20 | +56% | [Statement of Financial Position (Unaudited)](index=4&type=section&id=STATEMENT%20OF%20FINANCIAL%20POSITION) As of June 30, 2025, total assets increased slightly to $125.3 billion, with liabilities also rising, while total equity remained stable Statement of Financial Position Summary | (In millions) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $125.26B | $123.14B | | Total Liabilities | $105.91B | $103.58B | | Total Equity | $19.35B | $19.56B | [Non-GAAP Financial Measures](index=5&type=section&id=Financial%20Measures%20That%20Supplement%20GAAP) This section explains the company's use of non-GAAP financial measures, providing detailed reconciliations to their GAAP equivalents and clarifying why forward-looking reconciliations are not feasible [Explanation and Reconciliation of Non-GAAP Measures](index=5&type=section&id=Explanation%20and%20Reconciliation) This section explains and reconciles non-GAAP measures like Adjusted Revenue, Operating Profit, Adjusted EPS, and FCF to their GAAP equivalents - Management believes non-GAAP measures provide a more complete understanding of underlying operating results and trends of established, ongoing operations[18](index=18&type=chunk)[24](index=24&type=chunk) Q2 2025 Reconciliation of GAAP Profit to Non-GAAP Operating Profit | (In millions) | Q2 2025 | | :--- | :--- | | Profit (GAAP) | $2.39B | | *Adjustments* | ... | | **Operating profit (Non-GAAP)** | **$2.34B** | Q2 2025 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income | (In millions) | Q2 2025 | | :--- | :--- | | Net income from continuing operations (GAAP) | $2.01B | | *Adjustments (net of tax)* | ... | | **Adjusted net income (Non-GAAP)** | **$1.78B** | Q2 2025 Reconciliation of CFOA to Free Cash Flow (FCF) | (In millions) | Q2 2025 | | :--- | :--- | | Cash flows from operating activities (CFOA) (GAAP) | $2.35B | | Add: gross additions to PP&E | ($327M) | | Less: separation & restructuring cash expenditures | ($84M) | | **Free cash flow (FCF) (Non-GAAP)** | **$2.11B** | [Guidance Reconciliation Note](index=8&type=section&id=2025%20GUIDANCE%20AND%202028%20OUTLOOK) GE Aerospace cannot provide forward-looking non-GAAP reconciliations due to the unpredictable nature of future items like dispositions and restructuring costs - A reconciliation of forward-looking non-GAAP measures (Operating Profit, Adjusted EPS, FCF) to GAAP is not provided due to the unreasonable effort required to predict the timing and magnitude of certain items like gains/losses on dispositions and restructuring costs[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) [Supplementary Information](index=9&type=section&id=Supplementary%20Information) This section provides important context regarding forward-looking statements, potential risk factors, and an overview of GE Aerospace's global leadership in the aerospace industry [Forward-Looking Statements and Risk Factors](index=9&type=section&id=Caution%20Concerning%20Forward%20Looking%20Statements%3A) This report contains forward-looking statements subject to risks including macroeconomic conditions, supply chain issues, and geopolitical factors - The document contains forward-looking statements that are subject to risks and uncertainties which could cause actual results to differ materially[34](index=34&type=chunk) - Key risk factors include: - Macroeconomic and market volatility (inflation, supply chain, interest rates) - Geopolitical risks and global economic trends - Demand and financial strength of airframers, airlines, and suppliers - Impact of product safety or quality issues - Execution on business plans and managing production ramps[35](index=35&type=chunk)[43](index=43&type=chunk) [About GE Aerospace](index=10&type=section&id=About%20GE%20Aerospace) GE Aerospace is a global leader in aerospace propulsion and services, with a large installed engine base and a global workforce focused on innovation - GE Aerospace is a global leader in its field with an installed base of **~49,000 commercial** and **~29,000 military aircraft engines**, supported by a team of **~53,000 employees**[41](index=41&type=chunk)

Core Insights - The third China International Supply Chain Promotion Expo (Chain Expo) opened with GE Healthcare showcasing its commitment to domestic innovation and supply chain resilience [1] - GE Healthcare has been a key player in promoting the development of domestic supply chains in China for over 30 years, emphasizing the importance of a green supply chain [3][4] Group 1: Event Highlights - GE Healthcare displayed over ten advanced domestic medical devices, including CT and MRI machines, alongside critical components like CT bearings and superconducting wires [3] - The company launched the China Medical Equipment Green Supply Chain Innovation Ecosystem Alliance during the expo, collaborating with various industry associations to focus on green design and low-carbon manufacturing [3] Group 2: Sustainability Efforts - GE Healthcare's 2024 Sustainability Report revealed a 23% reduction in greenhouse gas emissions from operations and energy use compared to the 2022 baseline [4] - The Beijing facility, recognized as China's first "Lighthouse Factory" in the medical device sector, has implemented solar power projects that reduce CO2 emissions by over 2,000 tons annually [4] Group 3: Local Procurement and Partnerships - GE Healthcare's annual local procurement in China approaches 10 billion RMB, fostering growth among over 1,000 supply chain partners across major industrial clusters [5] - The collaboration with Luoyang Bearing has led to significant advancements, including the establishment of the first national technical standard for medical CT main bearings [5] Group 4: Joint Innovations - GE Healthcare and BOE Technology Group showcased three high-end monitoring product display modules, enhancing diagnostic accuracy through optimized performance for complex clinical scenarios [6] - Over 50% of the products sold in the Chinese market are now developed locally, reflecting GE Healthcare's commitment to local manufacturing and innovation [6] Group 5: Future Directions - GE Healthcare plans to strengthen green manufacturing, lean management, and digital transformation to enhance the resilience and innovation of China's supply chain [7]

Core Viewpoint - GE Healthcare emphasizes its role as a co-builder of the supply chain rather than just a purchaser, showcasing its commitment to sustainable development and innovation in the Chinese market [3]. Group 1: Sustainable Development Initiatives - GE Healthcare highlighted its latest advancements in green supply chains at the China International Supply Chain Promotion Expo, integrating best practices for sustainable development into every aspect of the supply chain [3]. - The company released its 2024 Sustainability Report, noting that its Beijing "lighthouse factory" solar project reduces carbon emissions by over 2,000 tons annually, and its Wuxi base has been selected as one of the first "zero-carbon" factory pilots, achieving a 23% reduction in overall carbon emissions compared to 2022 [3]. Group 2: Local Development and Procurement - GE Healthcare's local R&D proportion in the Chinese market has surpassed 50%, driving nearly 10 billion yuan in procurement scale and nurturing over 160 specialized enterprises [4]. - The company has established a comprehensive "research, production, sales, and service" system with over 1,000 suppliers, enhancing the resilience and dynamism of China's high-end medical device supply chain [4].