GE Aerospace Posts Record Q4 as $190B Backlog Cements Aviation Dominance
January 22, 2026 · by Fintool Agent
Ge Aerospace-7.38% delivered its 13th consecutive quarter of earnings beats, reporting Q4 adjusted EPS of $1.57 versus the $1.44 consensus—a 9% upside surprise—while revealing a record backlog approaching $190 billion that underscores the company's stranglehold on commercial aviation .
Orders surged 74% year-over-year to $27 billion in the quarter, with revenue climbing 20% to $11.9 billion . Management raised 2026 guidance above Street expectations, projecting EPS of $7.10-$7.40 versus the $7.11 consensus, and announced the company would reach its $10 billion operating profit target two years ahead of schedule .
Yet the stock fell 7.4% to $295 on the news—a "sell the news" reaction after shares had already soared 83% in 2025, making GE Aerospace one of the S&P 500's best performers.
The Numbers Behind the Beat
The fourth quarter capped a transformational year for the jet engine maker, which separated from GE Vernova in April 2024. Full-year results tell the story of a business firing on all cylinders:
| Metric | FY 2025 | FY 2024 | YoY Change |
|---|---|---|---|
| Revenue | $45.9B* | $35.0B | +21% |
| Adjusted EPS | $6.37 | $4.62 | +38% |
| Free Cash Flow | $7.7B | $6.2B | +24% |
| Orders | - | - | +32% |
| Backlog | $190B | $170B | +$20B |
*Values retrieved from S&P Global
The Commercial Engines & Services (CES) segment drove the outperformance, with services revenue surging 26% and spare parts sales jumping more than 25% . Internal shop visit revenue—a key high-margin metric—grew 24% as the company worked through its massive backlog .
"2025 was an outstanding year for GE Aerospace as we made operational progress, delivered on our financial commitments, and continued to invest in our future," CEO Larry Culp said on the earnings call .
Ask Fintool AI AgentLEAP Engine Hits Record Output
The star of the show remains the LEAP engine, the workhorse narrow-body powerplant that GE produces through its CFM International joint venture with Safran. Deliveries exceeded 1,800 units in 2025—a program record—up 28% year-over-year .
With the LEAP installed base expected to roughly triple between 2024 and 2030, GE is investing heavily in maintenance capacity. The company is dedicating approximately $500 million to LEAP MRO expansion, including new facilities in Malaysia, Brazil, and Dubai .
Crucially, CFO Rahul Ghai confirmed that LEAP original equipment will turn profitable in 2026—a milestone that should meaningfully improve segment margins as the program matures .
Meanwhile, the legacy CFM56 fleet continues to outperform expectations. Retirements came in at just 1.5% of the fleet in 2025, consistent with 2024 levels, versus earlier projections of 2-3% . Management now expects CFM56 shop visits to remain in the 2,300-2,400 range through 2028—"stronger for longer" in Culp's words .
2026 Outlook: $10 Billion Milestone Two Years Early
Management's 2026 guidance positions GE Aerospace to reach profitability levels originally targeted for 2028:
| Metric | 2026 Guidance | 2025 Actual | Growth |
|---|---|---|---|
| Revenue Growth | Low double-digit % | $45.9B* | 12% |
| Operating Profit | $9.85-$10.25B | $9.1B | +10-13% |
| Adjusted EPS | $7.10-$7.40 | $6.37 | +11-16% |
| Free Cash Flow | $8.0-$8.4B | $7.7B | +4-9% |
*Values retrieved from S&P Global
The CES segment is expected to deliver mid-teens revenue growth, with services up 15% driven by both higher shop visit volumes and expanded work scopes . LEAP internal shop visits are projected to grow 25% .
Defense & Propulsion Technologies (DPT) should contribute mid-to-high single-digit revenue growth, supported by a backlog that has swelled to $21 billion—up $3 billion year-over-year .
"We enter 2026 with solid momentum to build upon these results and are well positioned to create greater value for our customers," Culp said .
Ask Fintool AI AgentWhy the Stock Sold Off
Despite the strong results, GE shares dropped 7.4% on the day—wiping out roughly $25 billion in market value. The disconnect between fundamentals and price action reflects several factors:
Valuation stretched after 83% rally: GE Aerospace was the best-performing aerospace stock in 2025, gaining 83% versus the S&P 500's 17% return. At recent highs near $320, the stock traded at roughly 43x trailing earnings.
Revenue growth decelerating: While still robust, the low double-digit revenue growth guidance for 2026 represents a step-down from 2025's 21% expansion. Some investors may have hoped for continued acceleration.
GE9X headwinds doubling: Losses on the GE9X program—powering Boeing's+0.54% delayed 777X—are expected to double in 2026 as shipments increase .
Spare engine ratio headwind: The proportion of higher-margin spare engine sales versus installed engines is expected to decline, creating near-term margin pressure in CES .
Three Out of Four Flights
The fundamental bull case remains intact. GE Aerospace powers approximately three out of every four commercial flights globally, giving it unmatched scale in the industry's most profitable segment: aftermarket services .
More than 70% of commercial engine revenue comes from parts and maintenance contracts—recurring revenue streams that should expand as the global fleet ages and utilization remains elevated .
With airlines struggling to take delivery of new aircraft from Boeing+0.54% and Airbus-0.30% due to supply chain constraints, carriers are keeping older planes flying longer—a dynamic that directly benefits GE's aftermarket business.
"Our sustained competitive advantages support our leadership positions across both commercial and defense," Culp said. "With the industry's largest fleet—80,000 engines and growing—we've accumulated over 2.3 billion flight hours" .
Ask Fintool AI AgentWhat to Watch
Q1 2026 performance: Management expects a strong start with high-teens revenue growth and profit up year-over-year, though free cash flow will be down due to timing of certain payments .
LEAP profitability inflection: The transition to OE profitability in 2026 should improve segment margins as the program scales.
Boeing 777X certification: Further delays to the GE9X-powered widebody could extend losses on that program beyond current projections.
Supply chain execution: GE saw 40% year-over-year improvement in material input from priority suppliers in 2025 . Continued progress is essential to meeting output targets.
Defense backlog conversion: With DPT book-to-bill above 2x in Q4 and backlog at $21 billion, execution on defense programs will be key to sustaining growth beyond commercial aerospace.
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