General Electric ((GE)) has held its Q4 earnings call. Read on for the main highlights of the call.
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General Electric’s recent earnings call for 2024 conveyed a sense of optimism, grounded in the company’s impressive financial performance. Despite some supply chain hurdles, GE Aerospace demonstrated resilience, with significant growth in revenue, profit, and cash flow. The leadership’s confidence was bolstered by a robust demand for its products and strategic initiatives that appear to be paying off. The outlook for 2025 remains positive, with expectations for continued growth across key financial metrics.
Record Orders and Revenue Growth
In the fourth quarter of 2024, GE Aerospace achieved record orders with a 46% increase, while revenue grew by 16%, driven by double-digit growth in both services and equipment. For the full year, revenue saw a 10% increase, with profit rising by 30% to $7.3 billion, underscoring the company’s strong market position.
Strong Free Cash Flow
GE Aerospace reported a 21% increase in free cash flow in Q4, and nearly 30% for the entire year, reaching $6.1 billion. The company achieved a conversion rate exceeding 120%, highlighting its efficient cash management and operational effectiveness.
Impressive Growth in Commercial Engines & Services
The commercial engines and services segment exhibited impressive growth, with Q4 orders up by 50%, revenue increasing by 19%, and profit soaring by 44%. For the full year, the segment’s profit grew by 25% to $7.1 billion, reflecting strong demand and operational excellence.
Defense and Propulsion Technologies Growth
The defense and propulsion technologies segment also showed robust performance, with Q4 orders up by 22% and defense units nearly doubling sequentially. The full-year revenue rose by 6%, and profit increased by 17% to $1.1 billion, indicating strong demand in defense markets.
Supply Chain Constraints Impact Deliveries
Supply chain issues presented challenges, leading to lower internal shop visit volumes and flat commercial engine output, with LEAP deliveries down by 5% in Q4 2024. These constraints highlight the need for continued efforts to address supply chain efficiency.
Challenges in Meeting Demand
Despite strong demand, GE Aerospace faced material constraints and supplier issues, affecting its ability to fully meet potential demand. The company is committed to ongoing improvements in supply chain efficiency to better align with market needs.
Positive Outlook for 2025
Looking ahead to 2025, GE Aerospace executives provided robust guidance, forecasting low double-digit revenue growth, driven by mid-teens growth in the Commercial Engines & Services segment. Profit is expected to increase by $700 million at the midpoint, with total profit between $7.8 billion and $8.2 billion. EPS is projected to rise by 15% at the midpoint, while free cash flow is expected to reach between $6.3 billion and $6.8 billion. The company plans to enhance shareholder returns through increased share repurchases and a dividend raise, pending board approval.
In summary, GE Aerospace’s earnings call for 2024 painted a picture of a company in a strong financial position, with a clear path for future growth. The optimistic sentiment was supported by record-breaking achievements in orders and revenue, along with strategic initiatives aimed at overcoming supply chain challenges. As the company looks forward to 2025, its guidance suggests continued confidence in its ability to deliver value to shareholders and navigate the complexities of the market.
