Q1 2025 GE Aerospace Earnings Call Transcript
Key Points
- GE Aerospace (GE) reported a strong start to 2025 with orders up 12% and revenue growing 11%, driven by double-digit growth in both services and equipment.
- The company achieved a significant profit increase of 38% to $2.1 billion, leading to expanded margins of 23.8%.
- Commercial Engines & Services (CES) saw a 31% increase in orders and a 17% rise in revenue, contributing to a 35% growth in operating profit year over year.
- Defense & Propulsion Technologies (DPT) experienced a solid quarter with defense units growing 5% and profit increasing 16%.
- GE Aerospace (GE) is investing $1 billion in US manufacturing and hiring over 5,000 US workers, supporting domestic manufacturing revitalization efforts.
- Heightened tariffs are expected to result in additional costs, with GE Aerospace (GE) estimating a $500 million impact despite efforts to mitigate it.
- Spare parts delinquency has increased over two times year over year, indicating challenges in converting orders to revenue due to supply chain dynamics.
- The company is taking a cautious approach with a slower second half expected, resulting in departures up low-single digits for the full year.
- Total engine units were down 6%, with LEAP engine deliveries down 13%, attributed to a slower start to material inputs.
- The macroeconomic backdrop remains uncertain, with potential impacts from tariffs, a slowdown in airframer delivery schedules, and a global recession not factored into the guidance.
Good day, ladies and gentlemen, and welcome to the GE Aerospace first-quarter 2025 earnings conference call. (Operator Instructions) My name is Liz, and I will be your conference coordinator today. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to turn the program over to your host for today's conference, Blaire Shoor, from the GE Aerospace Investor Relations Team. Please proceed.
Thanks, Liz. Welcome to GE Aerospace's first-quarter 2025 earnings call. I'm joined by Chairman and CEO, Larry Culp; and CFO, Rahul Ghai.
Many of the statements we're making are forward looking and based on our best view of the world and our businesses as we see them today. As described in our SEC filings and website, those elements may change as the world changes. Additionally, Larry and Rahul, consistent with prior quarters, will speak to total company and corporate financial results and guidance today on a non-GAAP basis.
Larry, over to you.
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