TLDR
- GE Aerospace reported Q3 adjusted earnings of $1.66 per share, beating analyst estimates of $1.46 per share by $0.21
- Revenue reached $11.3 billion for the quarter, exceeding Wall Street expectations of $10.4 billion
- The company raised its full-year 2025 earnings guidance to $6.00-$6.20 per share from the previous range of $5.60-$5.80
- Commercial engine and services revenue jumped 27% to $8.9 billion with operating profit margins rising to 27.4%
- The stock is up approximately 80% year-to-date, outperforming the S&P 500 by 67 percentage points
GE Aerospace delivered another earnings beat in its third quarter results released Monday. The jet engine maker reported adjusted earnings of $1.66 per share on revenue of $11.3 billion.
Wall Street analysts had expected earnings of $1.46 per share on revenue of $10.4 billion. The company exceeded both targets by healthy margins.
The results marked another win for GE Aerospace. The company has beaten analyst estimates every quarter since separating from GE Vernova in 2024.
A year ago in Q3 2024, GE posted earnings of $1.15 per share on revenue of $8.9 billion. That puts year-over-year earnings growth at 44%.
The company wasted no time raising its outlook for the full year. Management now expects 2025 earnings between $6.00 and $6.20 per share.
The previous guidance range stood at $5.60 to $5.80 per share. The new midpoint of $6.10 sits above the current analyst consensus of $5.92.
Commercial Engine Business Drives Growth
The commercial engine and services division powered much of the quarter’s success. Revenue in this segment jumped 27% to reach $8.9 billion.
New orders came in even stronger at $10.3 billion. Operating profit margins in the commercial business expanded to 27.4%.
That margin figure represents a 1.7 percentage point improvement from the same period last year. Higher demand for commercial travel continues to fuel the business.
Defense operations also contributed to the strong quarter. Defense sales grew 26% compared to Q3 2024.
The defense backlog expanded during the quarter. This provides visibility into future revenue streams for the company.
Stock Performance and Valuation
GE Aerospace shares rose 1.3% to $36.60 in premarket trading following the announcement. The stock briefly touched a 52-week high earlier in the session.
In mid-September, shares hit an all-time high just below $300. Investors waited 9,150 days for that record.
The stock has climbed approximately 80% year-to-date. That performance beats the S&P 500 by 67 percentage points.
The rally has pushed valuation metrics higher. Shares now trade at roughly 44 times estimated 2026 earnings.
That represents a premium compared to peers like RTX, which trades at about 24 times 2026 estimates. But GE Aerospace is expected to grow earnings faster than RTX.
Cash Flow Guidance Raised
Free cash flow expectations also got a boost. The company now anticipates generating about $7.1 billion in free cash flow for 2025.
Previous guidance called for $6.7 billion in free cash flow. The $400 million increase reflects stronger operational performance.
Options markets implied a 5% move in either direction following the earnings report. Over the past four quarterly reports, shares have moved an average of 6%.
The stock has fallen twice and risen twice after those four previous reports. Vertical Research Partners analyst Rob Stallard maintains a Buy rating with a $340 price target on the stock.
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