GE Aerospace (GE) Stock: Q4 Earnings Beat Estimates but Shares Decline

TLDR

• GE Aerospace reported Q4 earnings of $1.57 per share, beating analyst estimates of $1.44, with revenue hitting $11.9 billion versus expected $11.2 billion.
• The company forecasts low-double-digit sales growth for 2026 with operating profit between $9.85 billion and $10.25 billion, slightly above analyst projections.
• Fourth-quarter orders jumped 74% year-over-year to $27 billion, while profit margins increased 1.2 percentage points to 22.4%.
• Despite strong results, the stock dropped 0.2% as the earnings beat of 9% fell short of GE’s recent pattern of beating estimates by an average of 28%.
• GE Aerospace has now beaten Wall Street earnings estimates for 13 consecutive quarters, with stock price up 69% over the past year.

GE Aerospace delivered another quarterly earnings beat on Thursday, extending its winning streak to 13 consecutive quarters. But investors weren’t impressed.

The company reported fourth-quarter earnings per share of $1.57, beating Wall Street’s estimate of $1.44 by 9%. Revenue came in at $11.9 billion, well above the expected $11.2 billion.

A year ago, the company posted per-share earnings of $1.32 from adjusted sales of $9.9 billion. The latest results show clear growth.

GE Aerospace, GE

Despite the beat, GE Aerospace stock fell 0.2% to close just under $318. The stock had initially jumped more than 5% in premarket trading before giving up those gains.

The reaction comes down to expectations. GE has beaten estimates by an average of 28% over its past 12 quarterly reports. Thursday’s 9% beat was the smallest in that streak.

Fourth Quarter Performance Shows Strength

The numbers themselves tell a positive story. Fourth-quarter orders reached $27 billion, up 74% year-over-year. This metric signals strong demand for GE’s products going forward.

Profit margins improved as well. The company posted margins of 22.4%, up 1.2 percentage points from the previous year.

GE’s guidance for 2026 also exceeded analyst expectations. The company forecasts low-double-digit sales growth, operating profit between $9.85 billion and $10.25 billion, and earnings per share between $7.10 and $7.40.

Analysts currently project 11% sales growth, $10.1 billion in operating profit, and earnings of $7.14 per share. The midpoints of GE’s guidance sit above these estimates.

The commercial engine and service business generated operating profit of $2.3 billion, up 5% year-over-year. However, margins in this segment dropped 4.2 percentage points to 24%.

Higher research and development spending contributed to the margin decline. Increased production of new engines, including the GE9X that powers Boeing’s 777X jet, also pressured the numbers.

Valuation Concerns Loom Large

Coming into Thursday’s report, GE Aerospace stock had climbed 69% over the past 12 months. The shares now trade at about 44 times forward earnings, up from 36 times a year ago.

That’s a rich valuation, even for a company with consistent performance. Options markets expected shares to move about 4% in either direction following the earnings release.

Commercial air travel demand remains strong. The aftermarket parts and service business continues to benefit from slower aircraft retirement rates.

Boeing and Airbus are projected to deliver about 1,600 jets in 2026, up from 1,400 in 2025. This should help GE’s original equipment business, though margins tend to be lower in that segment compared to parts and services.

The company has seen 11 positive earnings per share revisions and just one negative revision in the last 90 days. Shares are up 58.62% over the past year and 4.81% in the last three months.

GE Aerospace stock entered this week trading north of $325, a far cry from the $81 price point when the earnings beat streak began in 2023. Quarterly earnings are now roughly 40% higher than at the start of that streak.

The stock has moved an average of about 4% following the past four quarterly reports, rising three times and falling once.

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