GE Aerospace (GE 5.18%) topped Wall Street’s expectations for the first quarter Tuesday morning, delivering 11% year-over-year revenue growth. Investors cheered the results, sending shares up by about 5% as of 1:30 p.m. ET.
Increasing profits in a tough environment
GE Aerospace manufactures jet engines and aircraft interiors. The company earned $1.48 per share on sales of $9.9 billion in the quarter, surpassing the consensus estimates of $1.27 per share in earnings on $9 billion in sales. Its operating margin increased by 460 basis points to 23.8%, and it generated $1.4 billion in free cash flow.
Management said it does expect that tariffs will impact its business, but is still forecasting that its 2025 revenue will rise by 15% and that its operating profit will be up 35%. In a Securities and Exchange Commission filing accompanying the earnings release, GE said, “we are optimizing operations” in response to tariffs as well as “taking measures to control cost and implementing pricing actions to primarily mitigate the remaining impact.”
GE said it expects to earn between $5.10 per share and $5.45 per share in 2025. The middle of that range is well below the analysts’ $5.42 per share consensus estimate.
Is GE Aerospace a buy?
Aerospace companies face a lot of turbulence right now, but GE has the advantage of flying into those headwinds with a solid foundation in place. On the post-earnings call, management emphasized that the company has a “robust backlog” to support future sales, noting that first-quarter orders were up 12% to $12.3 billion.
Management also said they have held discussions with the White House about tariffs.
The ride ahead could be choppy, but GE Aerospace has the wherewithal to navigate whatever the coming months might bring and generate significant long-term growth from here.