GE Aerospace Earnings: Supply and Demand Took Off This Quarter

Key Morningstar Metrics for GE Aerospace

• Fair Value Estimate: $279.00
• Morningstar Rating: ★★
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: Medium

What We Thought of GE Aerospace’s Earnings

GE Aerospace’s GE third-quarter commercial revenue grew 27% to $8.9 billion at 27.4% operating margin, while defense revenue grew 26% to $2.4 billion. Margin rose to 13.6% compared with the year-ago quarter. Management raised its full-year revenue, profit, and cash flow expectations commensurately.

Why it matters: It seems efforts over the past 18 months to recover from the supply chain disruptions that had slowed GE’s progress in meeting engine demand in 2024 have begun to pay off right as a spike in demand for engine servicing arrived.

• While demand for engine service historically follows the growth of aircraft departures, which have decelerated recently after their post-pandemic rebound, in mid-2025, a wave of pent-up demand from airlines to service older engines like the CFM56 and GE90 has driven unexpectedly strong business results just as GE’s parts supply chain seems to be loosening up.
• We admire GE’s evident commitment to ongoing process improvements, which allow it to increase throughput in its service business and overall productivity while managing a volatile supply chain. These efforts and their result lend credibility to management’s claims that it can maintain and increase operating margins despite inflationary cost pressure.

The bottom line: We have raised our fair value estimate for wide-moat GE Aerospace’s shares to $279 per share from $266, reflecting both near-term lucrative shop visits and ongoing efficiency improvements at the company, reflected in our forecast for continued service margin expansion.

• The shares trade within around 7% of our fair value estimate. We anticipate the firm’s continued dividend growth and share repurchases over time will drive attractive shareholder returns, while the franchise’s opportunity to compound its value should, all else equal, drive our fair value estimate up at our cost of equity of 9% per year.