GE Aerospace (GE) Stock: Q125 Profit Soars 38% Despite Tariff Headwinds

TLDR

Q1 2025 profit surged 38% to $2.1 billion; EPS rose 60% to $1.49.
Revenue increased 11%, driven by strong demand for commercial services.
Free cash flow reached $1.4 billion; full-year FCF forecast $6.3B–$6.8B.
Orders up 12%, backlog over $170 billion.
Tariff-related costs expected to hit $500 million this year.

GE Aerospace (NYSE: GE) closed at $189.18 on April 22, gaining 6.07% following a robust Q1 2025 earnings report. The company posted $2.1 billion in profit, representing a 38% year-over-year increase, and achieved a 60% rise in earnings per share to $1.49. Its next earnings report is scheduled between July 21 and July 25, 2025.

GE Aerospace (NYSE: GE )

Strong Commercial Performance and Expanding Margins

Revenue grew 11% in Q1, powered by a 17% rise in Commercial Engines & Services revenue. Orders surged 12%, reflecting strong global demand. GE’s margins also expanded to 23.8%, aided by efficiency gains in both commercial and defense segments.

The commercial services backlog now exceeds $140 billion, highlighting sustained customer engagement. Internal shop visit revenue rose 11%, while LEAP external shop visits jumped over 60%, signaling continued strength in GE’s service ecosystem.

Defense and R&D Initiatives Support Long-Term Growth

GE’s Defense & Propulsion Technologies unit delivered a 5% increase in revenue and a 16% profit gain, contributing to a well-balanced performance across business lines.

Research and development spending remains high at $3 billion annually, underlining GE’s push for innovation in aviation and propulsion. The company is also investing $1 billion in U.S. manufacturing and hiring over 5,000 workers to boost domestic output.

Guidance and Cash Flow Outlook Remain Upbeat

GE forecasts 2025 revenue growth in the low double digits. It expects annual profit between $7.8 billion and $8.2 billion, EPS in the range of $5.10 to $5.45, and free cash flow between $6.3 billion and $6.8 billion.

Free cash flow for Q1 came in at $1.4 billion. The company also holds $13.4 billion in cash and maintains a forward dividend of $1.44 (0.76% yield).

Tariff Pressures and Operational Challenges

Despite the strong quarter, GE warned of potential headwinds. Tariff-related expenses could add $500 million in costs this year. Spare parts delinquency more than doubled year-over-year, reflecting lingering supply chain disruptions.

Engine deliveries were down 6% and LEAP engine output fell 13%, largely due to slow material input at the start of the year. A slower second half is anticipated, with departures expected to decline slightly.

Outperformance and Market Position

GE has vastly outpaced the S&P 500 across all major timeframes. The stock is up 13.64% year-to-date versus the S&P 500’s 10.10% decline. Over five years, GE boasts a 504.02% return, compared to the S&P’s 88.90%.

Despite macro uncertainty, GE Aerospace remains on a strong growth trajectory, backed by a solid backlog, resilient cash flow, and long-term investment in U.S. manufacturing and R&D.

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