TLDR
- GE Aerospace posted Q4 EPS of $1.57, surpassing the $1.44 consensus, with revenue of $11.9 billion beating the $11.2 billion estimate.
- The stock fell 0.2% despite the beat, as the 9% earnings surprise was below GE’s typical 28% average beat rate over 13 consecutive quarters.
- Orders climbed 74% to $27 billion year-over-year, with profit margins expanding to 22.4% from 21.2% in the prior year.
- Full-year 2026 guidance calls for operating profit of $9.85-$10.25 billion and EPS of $7.10-$7.40, topping analyst forecasts.
- The stock trades at 44 times forward earnings after gaining 69% over the past year, up from 36 times earnings a year ago.
GE Aerospace extended its earnings beat streak to 13 quarters on Thursday, but the market response was lukewarm at best. The stock dipped 0.2% despite posting numbers that topped Wall Street forecasts.
The company delivered fourth-quarter earnings of $1.57 per share. Analysts expected $1.44. Revenue reached $11.9 billion against estimates of $11.2 billion.
Last year’s fourth quarter saw earnings of $1.32 per share on adjusted sales of $9.9 billion. The year-over-year growth is clear.
But here’s the catch. GE’s recent track record set the bar high. The company has beaten earnings estimates by an average of 28% over its past 12 reports. Thursday’s 9% beat fell short of that pattern.
The stock jumped more than 5% in premarket trading before reversing course. It closed just under $318 while broader market indices posted gains.
Orders and Margins Point to Healthy Demand
The underlying business metrics look solid. Fourth-quarter orders hit $27 billion, a 74% increase from the year-ago period. That’s a strong indicator of future revenue.
Profit margins improved to 22.4% from 21.2% a year earlier. The 1.2 percentage point expansion shows operational efficiency gains.
GE’s commercial engine and service division generated $2.3 billion in operating profit, up 5% year-over-year. Margins in this segment fell 4.2 percentage points to 24% due to higher R&D spending and increased production of new engines like the GE9X.
The GE9X powers Boeing’s 777X jet, which is still awaiting certification. Ramping up production for new aircraft engines typically weighs on near-term margins but sets up future revenue streams.
2026 Outlook Beats Expectations
Management’s guidance for 2026 exceeded analyst projections. The company expects low-double-digit sales growth, operating profit between $9.85 billion and $10.25 billion, and EPS of $7.10 to $7.40.
Wall Street currently models 11% sales growth, $10.1 billion in operating profit, and earnings of $7.14 per share. GE’s guidance midpoints sit above all three metrics.
The aftermarket parts and service business continues to benefit from slower aircraft retirement rates. Planes are staying in service longer due to production challenges at Boeing and Airbus.
Those two manufacturers are expected to deliver around 1,600 jets in 2026, up from 1,400 in 2025. More deliveries mean more engines for GE’s original equipment business.
Profit margins are typically lower on new engine sales compared to aftermarket parts and services. But volume growth matters for long-term positioning.
Valuation Gets Stretched
GE Aerospace stock has climbed 69% over the past year. Shares now trade at 44 times forward earnings, up from 36 times twelve months ago.
That premium valuation leaves little room for disappointment. When the company started its earnings beat streak in 2023, shares traded around $81. They entered this week above $325.
Quarterly earnings have grown roughly 40% since the streak began. The stock has posted an average 2% gain following each earnings beat.
Options markets implied a 4% move in either direction for Thursday’s report. Shares have moved an average of 4% following the past four quarterly releases, rising three times and falling once.
In the past 90 days, GE has seen 11 positive EPS revisions and just one negative revision. The stock is up 58.62% over the past year and 4.81% over the past three months.
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