GE Aerospace Q3 Earnings & Revenues Surpass Estimates, Increase Y/Y

Core Insights - GE Aerospace reported strong third-quarter 2025 results, with revenues and earnings exceeding expectations, following its spin-off from General Electric in April 2024 [1][2]. Financial Performance - Adjusted earnings were $1.66 per share, surpassing the Zacks Consensus Estimate of $1.46, and reflecting a 44% year-over-year increase [2][8]. - Total revenues reached $12.2 billion, a 24% year-over-year increase, with adjusted revenues at $11.3 billion, up 26% year-over-year, beating the consensus estimate of $10.3 billion [2][3]. Segment Analysis - The Commercial Engines & Services segment saw revenues increase by 27% year-over-year to $8.88 billion, exceeding the consensus estimate of $8.25 billion, driven by higher shop visit work and increased spare parts revenue [3]. - The Defense & Propulsion Technologies segment reported revenues of $2.83 billion, up 26% year-over-year, also surpassing the consensus estimate of $2.52 billion, although total orders decreased by 5% year-over-year to $2.9 billion [4]. Cost and Profitability - Cost of sales increased by 24.7% year-over-year to $7.76 billion, while selling, general, and administrative expenses decreased by 10.2% to $1.2 billion [5]. - Operating profit (non-GAAP) was $2.3 billion, reflecting a 26.5% year-over-year increase, with a stable margin of 20.3% [5]. Balance Sheet and Cash Flow - As of the end of Q3 2025, GE Aerospace had cash and equivalents of $12.5 billion, down from $13.6 billion at the end of December 2024, with long-term borrowings increasing to $18.8 billion [6]. - Adjusted free cash flow for the quarter was $2.36 billion, compared to $1.82 billion in the same quarter last year [6]. Shareholder Returns - The company paid $0.4 billion in dividends and repurchased approximately $1.8 billion in shares during the quarter [7]. Future Outlook - For 2025, GE expects adjusted EPS in the range of $6.00-$6.20 and free cash flow up to $7.3 billion, with adjusted revenues projected to grow in the high-teens range [8][9]. - The Commercial Engines & Services segment is expected to see revenue growth in the low twenties range, while the Defense & Propulsion Technologies segment is projected to grow in the high-single-digit range [10].