GEBy Calypso Research7 min read

General Electric Company (GE) Q4 2025 Earnings Analysis

GE Takes a Turbulent Turn with $12.7B Earnings Drop

Key Takeaways

General Electric Company (GE) reported Q4 2025 earnings with revenue of $12.7B, representing a +17.6% year-over-year change. The stock moved -7.4% on earnings day.

The bull case: Robust and lengthening aftermarket demand across CFM56, LEAP, and widebody fleets, combined with improving LEAP OE economics and structurally strong free cash flow, supports sustained double-digit EPS and cash growth through 2028 and potentially above prior targets.

The bear case: Mix headwinds from GE9X and growing OE, persistent supply-chain and execution risks, and high ongoing R&D and capex needs could cap CES margin expansion and expose earnings and free cash flow to downside if aftermarket or legacy-engine durability trends weaken.

Financial Highlights

  • Revenue: $12.7B (+17.6% YoY)
  • Gross Profit: $4.4B (34.2% margin, -3.2% YoY)
  • Operating Income: $2.4B (18.5% margin, -5.5% YoY)
  • Net Income: $2.5B
  • TTM Revenue: $45.9B

Stock Performance

  • Earnings Day Move: -7.4%
  • Year-to-Date: +5.7%
  • 1-Year Return: +70.6%
  • vs. S&P 500 (since earnings): -4.7%
  • vs. Nasdaq (since earnings): -3.5%

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What Management Said

Here are the key debates and direct quotes from General Electric Company's Q4 2025 earnings call:

Sustainability and Upside of Commercial Aftermarket / Services Growth in 2026

Sentiment: Positive

"We haven't seen anything here at the beginning of the year that gives us pause relative to the tailwinds, the momentum that you referenced continuing... we feel like we have another very strong commercial services year supporting the aftermarket... at a rate that should be up mid-teens." — Larry Culp
"We expect both shop visits and spare parts to be up kind of the same range as mid-teens as the overall services growth... external demand environment looks good. We're expecting double-digit removals this year from engines that have already flown... all of that leads to that 15% growth that we mentioned on shop visit." — Rahul Ghai

LEAP Program Economics, OE Breakeven, and Supply Chain Investment Needs

Sentiment: Positive

"To answer your question on the LEAP profitability, yes, we expect LEAP OE to be profitable in 2026 as per our prior plans." — Rahul Ghai
"I think we have improved over the course of 2025 our visibility further out and deeper into the supply chain... I feel very good that with the body of work we put in 2025, we're poised to step up again with the supply base, be it process improvement, be it capital expansion, and the like, to keep pace with these considerable tailwinds." — Larry Culp

CES Margin Trajectory: Mix Headwinds (LEAP, GE9X, Lower Spares) vs Services Strength

Sentiment: Mixed

"On 9x, our losses ended... a couple of hundred million dollars of losses in 2025... for '26... our losses on the 9x programs will double year over year... our current guidance for '26 incorporates those losses getting to that level." — Rahul Ghai
"Strong services growth, with 3 and a half billion dollars expected in services revenue growth in '26 that drops through at a healthy clip... OEM shipments are increasing, spare engine ratio gradually comes down... and then NINEX shipments and with R&D coming in as well... despite that, expect margins to be flattish in 2026." — Rahul Ghai

Longer-Term CES Margin Outlook to 2028 (Including CFM56, LEAP Aftermarket, GE90)

Sentiment: Positive

"When we spun, [we were] thought to be at a $10 billion operating profit level two years from here. We're able to hit that milestone, and will hit it at the midpoint here in 2026... despite progress in defense... we have opportunity to deliver on the $11.5 billion operating profit targeted for 2028. Potentially do better." — Larry Culp
"Back in July when we gave 2028 guidance, [we] expected around 21% margins in '28. We got there last year, jumping off [a] higher point... CFM56 goodness, retirements trending low... LEAP service profitability continues to improve... wide body program, especially GE90, no retirements expected. All that looks toward 2028, improved margin profile." — Rahul Ghai

Supply Chain, Turnaround Times, and MRO Productivity Improvements

Sentiment: Positive

"We talked about a 40% year-over-year improvement from our priority suppliers. Those suppliers delivering at a 90% plus level to their commitments takes a lot of noise out of the system... that is an unlock for us... those turnaround times that you see improve in the fourth quarter... really is a combination of better input materials and better execution." — Larry Culp
"If a team on the floor has to stop a shop visit, if they are idle waiting for a part delivery, that's obviously unproductive time. If they have everything they need from induction to certification, we will see and have seen early signs of real productivity bumps there as well." — Larry Culp

Bull Case

Robust and lengthening aftermarket demand across CFM56, LEAP, and widebody fleets, combined with improving LEAP OE economics and structurally strong free cash flow, supports sustained double-digit EPS and cash growth through 2028 and potentially above prior targets.

Bear Case

Mix headwinds from GE9X and growing OE, persistent supply-chain and execution risks, and high ongoing R&D and capex needs could cap CES margin expansion and expose earnings and free cash flow to downside if aftermarket or legacy-engine durability trends weaken.

Looking Ahead

With revenue growing +17.6% year-over-year, the key question is whether General Electric Company can sustain this growth trajectory, particularly around sustainability and Upside of Commercial Aftermarket / Services Growth in 2026. With operating margins at 18.5%, margin trends will remain a focal point. The market's negative earnings-day reaction signals that investors need to see stronger execution, and the next earnings report will be a key catalyst for the stock.

Frequently Asked Questions

What was General Electric Company's revenue in Q4 2025?

General Electric Company reported Q4 2025 revenue of $12.7B, representing a +17.6% year-over-year change.

Did General Electric Company beat earnings expectations in Q4 2025?

The stock declined -7.4% on earnings day, suggesting the results fell short of market expectations. The current bull case centers on: Robust and lengthening aftermarket demand across CFM56, LEAP, and widebody fleets, combined with improving LEAP OE economics and structurally strong free cash flow, supports sustained double-digit EPS and cash growth through 2028 and potentially above prior targets.

What is the bull case for GE stock?

The bull case for GE centers on: Robust and lengthening aftermarket demand across CFM56, LEAP, and widebody fleets, combined with improving LEAP OE economics and structurally strong free cash flow, supports sustained double-digit EPS and cash growth through 2028 and potentially above prior targets.

What is the bear case for GE stock?

The bear case for GE centers on: Mix headwinds from GE9X and growing OE, persistent supply-chain and execution risks, and high ongoing R&D and capex needs could cap CES margin expansion and expose earnings and free cash flow to downside if aftermarket or legacy-engine durability trends weaken.

How has GE stock performed since its Q4 2025 earnings?

GE moved -7.4% on the day of its Q4 2025 earnings report, underperforming the S&P 500 by +4.7% since earnings. Year-to-date, the stock has returned +5.7%.

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