GE Aerospace expects its full-year 2025 outlook to now factor in the impact of tariffs, forecasting full-year departures to grow at a low single-digit rate, down from a prior forecast of mid-single-digit growth.
The company continues to expect 2025 adjusted revenue growth in the low double-digit range, after reporting $35.1bn in adjusted revenue for 2024, with operating profit projected between $7.8bn and $8.2bn, up from $7.3bn last year. Adjusted operating profit margin is expected to remain strong after hitting 20.7% in 2024.
GE Aerospace also maintained its adjusted earnings per share (EPS) guidance for 2025 at between $5.10 and $5.45, compared with $4.60 in 2024. Free cash flow is forecast between $6.3bn and $6.8bn, up from $6.1bn a year prior, with cash conversion expected to exceed 100%.
The company noted that tariffs are expected to introduce additional costs across both GE’s operations and supply chain. To mitigate this impact, the company said it is actively leveraging programs made available by the current US administration - including duty drawback provisions - and implementing strategies such as the expansion of foreign trade zones to optimise operations.
“Through these efforts, we anticipate reducing the tariff-related costs to approximately $500 million, while continuing to pursue additional actions to offset the remaining impact,” said GE Aerospace chairman and CEO Lawrence Culp on an earnings call.
Culp said the measures taken by the company along with a commercial services backlog of over $140bn are expected to help it produce the adjusted earnings forecast of up to $5.45 per share this year.
When discussing tariff implications with analysts, Culp noted that he has spoken with a number of senior people within the Trump administration, including the president himself. “We have been full throated in our support of the administration's efforts to support American competitiveness and revitalise American manufacturing,” he stated.
Culp also noted that the company’s message to the administration has simply been to recognise the “position of strength” a tariff-free regime has provided the country and to thoughtfully consider the merits of re-establishing that framework. He added that he is “hopeful” the message got through.
During the first quarter of the year, GE Aerospace reported a total revenue of $9.94bn, an 11% increase when compared to the same period of last year. Profit increased by 13% during the period to $2.25bn. The company’s profit margin also edged higher, rising 40 basis points year over year to 22.6%.
Earnings per share (EPS) from continuing operations reached $1.83, a 16% increase compared to the $1.58 reported a year ago.
Commercial services saw growth with orders up 31% and revenue up 17%, driving total operating profit growth of 35% in comparison to the same quarter of the year prior.
During the first three-months of the year, the company secured engine commitments with Japan’s ANA for LEAP and GEnx engines, Malaysia Aviation Group for LEAP engines and Korean Air for GEnx and GE9X engines, as well as a contract from the US Air Force valued up to $5bn for F110-GE-129 engines.
“GE Aerospace had a strong start to 2025 with orders and revenue up double digits, driven by commercial services, and adjusted EPS up 60%. We continue to drive improvements through FLIGHT DECK, tackling supply chain constraints head on to accelerate deliveries throughout 2025,” said Culp.
He continued: “The macroeconomic dynamics we are operating in today require us to take a number of strategic actions, such as controlling costs, and leveraging available trade programs. Based on what we know today, these actions, along with our solid first quarter and commercial services backlog of over $140bn, enable us to maintain our full-year guidance.”
Despite the strong earnings performance, cash flow faced some headwinds. Cash from operating activities came in at $1.54bn down 5% on 2024, while free cash flow declined 14% to $1.44bn. The company attributed these decreases to timing factors in working capital and continued investments in production capacity to meet sustained demand.