Robust financial performance in Q2 2025 positions GE Aerospace for accelerated long-term growth

Overview

GE Aerospace reported a strong second quarter of 2025, driven by double-digit revenue growth, record profitability, and continued commercial momentum. The company posted notable improvements in free cash flow, segment performance, and operating margins, while announcing upward revisions to its 2025 guidance and long-term 2028 outlook.

GE Aerospace Chairman and CEO H. Lawrence Culp, Jr. commented: “The GE Aerospace team delivered an excellent second quarter with free cash flow nearly doubling and more than 20% growth in orders, revenue, operating profit, and EPS. We are raising our 2025 guidance and 2028 outlook, with our operating performance and robust commercial services outlook underpinning our higher revenue, earnings, and cash growth expectations. Our team is using FLIGHT DECK to improve safety, quality, delivery and cost—always in that order—as we strive to provide unrivaled customer service and deliver on our roughly $175 billion backlog.”

Q2 2025 vs. Q2 2024:

Total revenue (GAAP) reached $11.02bn (+21% YoY), while adjusted revenue (non-GAAP) increased to $10.15bn (+23% YoY).
- Commercial Engines & Services (CES) orders reached $11.7bn (+28% YoY), while revenue surged to $8.0bn (+30% YoY).
  - Service revenue rose +29% YoY, supported by spare parts demand and internal shop visits, while equipment revenue increased 35% on stronger volumes and pricing.
  - Operating profit totaled $2.23bn (+33% YoY), with a margin of 27.9% (+50 bps YoY). Growth was supported by increased deliveries and volume, strong pricing across product lines, improved supplier performance via FLIGHT DECK initiatives.
- Defense & Propulsion Technologies (DPT) orders rose to $2.9bn (+24% YoY), while revenue increased to $2.56bn (+7% YoY). Growth was led by Propulsion & Additive Technologies (+9%) and Defense & Systems (+6%), despite some engine mix challenges.
  - Operating profit improved to $362m (+5% YoY), with a margin slightly lower of 14.1% (-20 bps YoY).
GAAP net income from continuing operations rose to $2.00bn (+51% YoY), with a GAAP EPS of $1.87 (+56% YoY), while adjusted EPS rose to $1.66 (+38% YoY).
Operating profit (non-GAAP) totaled $2.34bn (+23% YoY), with an adjusted operating margin of 23.0%.
Free cash flow (non-GAAP) more than doubled to $2.11bn in Q2 (+92% YoY), reflecting higher earnings conversion, improved collections, and strong operating execution.
Operating cash flow (GAAP) recorded a value of $2.35bn in Q2 2025, more than doubling the $957m posted in the same quarter last year, a clear sign of improved operational performance and earnings quality.
The company reaffirmed its commitment to shareholder value, planning to increase capital returns by over 20% between 2024 and 2026, targeting a total of ~$24bn. Beyond 2026, GE Aerospace expects to return at least 70% of free cash flow to investors through a combination of dividends and share buybacks.
As of June 30, 2025, net debt and leverage remained stable, supported by solid liquidity and approximately $11bn in cash reserves, ensuring financial flexibility for growth investments and strategic initiatives.

Following its strong second-quarter results, GE Aerospace raised both its full-year 2025 guidance and long-term financial outlook, underscoring management’s confidence in execution and sustained demand across its commercial and defense businesses. For 2025, the company now expects adjusted revenue growth in the mid-teens, above the previously projected low double digits. Operating profit is anticipated to range between $8.2bn and $8.5bn, up from the prior estimate of $7.8bn-$8.2bn. Adjusted EPS is forecast at $5.60 to $5.80, marking a significant increase over the earlier guidance of $5.10 to $5.45. Free cash flow is projected to reach between $6.5bn and $6.9bn, with a conversion rate remaining above 100%.

Looking further ahead, GE Aerospace updated its 2028 long-term outlook, now projecting operating profit to reach approximately $11.5bn, an increase of $1.5bn versus its prior forecast. Free cash flow is expected to rise to around $8.5bn, while adjusted EPS is targeted at $8.40. The company also reaffirmed its goal of achieving a double-digit compound annual growth rate (CAGR) in adjusted EPS from 2024 through 2028, supported by continued innovation, disciplined operational execution, and a strong commercial engine backlog.

GE Aerospace has continued its strong upward momentum, gaining approximately 3% over the past week, particularly following its recent earnings report. The stock closed last week firmly above both the 50-day simple moving average and the 200-day SMA, reflecting a well-established uptrend. The recent price breakout to new highs has been accompanied by an increase in trading volume, signaling strong bullish conviction from investors. This positive price action confirms market confidence in the company’s outlook, with the post-earnings rally reinforcing the strength of the trend. As long as the stock remains above the $260-$270 range, which now acts as immediate support, the technical setup favors continuation toward higher levels, while any consolidation would likely be viewed as a healthy pause in a broader bullish structure.