What Happened?
Shares of industrial conglomerate GE Aerospace (NYSE: GE) fell 5.7% in the afternoon session after the company reported fourth-quarter results that beat expectations, but provided an underwhelming revenue forecast.
The industrial conglomerate's revenue grew 17.6% year on year to $12.72 billion, and its adjusted earnings per share of $1.57 also surpassed consensus estimates. In addition, GE's earnings guidance for the upcoming financial year was slightly ahead of forecasts. However, these positive points were overshadowed by a weaker outlook for sales growth. Analysts now expect the company's revenue to grow just 1% over the next 12 months, a notable slowdown from its recent performance. This tepid sales projection appeared to temper investor enthusiasm, suggesting the market was hoping for a stronger growth story.
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What Is The Market Telling Us
GE Aerospace’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 9.4% on the news that the company reported strong fourth-quarter results, which blew past analysts' revenue estimates amid improved demand for spare parts, commercial engines, and services.
Growth accelerated during the quarter as orders rose by 46% compared to the previous year. The improved demand and pricing enabled the company to grow its cash flow and report earnings ahead of analysts' expectations. Guidance was also encouraging, with the company expecting double-digit revenue and EPS growth (in line with consensus) in FY 2025, with greater than 100% free cash flow conversion. Management also highlighted the focus on returning some of the value generated to shareholders after announcing a $7B stock buyback program and a 30% dividend increase. Overall, this was an impressive quarter.
GE Aerospace is down 6% since the beginning of the year, but at $301.36 per share, it is still trading close to its 52-week high of $327.54 from January 2026. Investors who bought $1,000 worth of GE Aerospace’s shares 5 years ago would now be looking at an investment worth $3,391.
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