GE Aerospace (GE) Stock: Earnings Beat Can’t Satisfy Investors

TLDR

• GE Aerospace reported Q4 earnings of $1.57 per share, beating the $1.44 consensus by 9%, with revenue of $11.9 billion topping the $11.2 billion estimate.
• Shares fell 0.2% to $318 after spiking 5% premarket, as the beat margin disappointed investors accustomed to GE’s 28% average beat over 12 prior quarters.
• Orders jumped 74% to $27 billion year-over-year, with operating margins improving 1.2 percentage points to 22.4% in the fourth quarter.
• The company guided 2026 operating profit to $9.85-$10.25 billion and EPS to $7.10-$7.40, both ahead of Wall Street’s $10.1 billion and $7.14 projections.
• GE Aerospace stock trades at 44 times forward earnings after rising 69% in 12 months, up from 36 times earnings valuation a year ago.

GE Aerospace keeps winning, but investors are getting picky about the margins. Thursday’s fourth-quarter results marked the company’s 13th consecutive earnings beat, yet shares ended lower.

The numbers themselves looked good. Earnings came in at $1.57 per share against expectations of $1.44. Revenue hit $11.9 billion, crushing the $11.2 billion forecast.

Last year’s comparable quarter showed $1.32 per share on adjusted sales of $9.9 billion. The growth trajectory is clear.

GE Aerospace, GE

Still, shares dropped 0.2% to close just below $318. An early morning spike of more than 5% faded throughout the trading session.

The issue isn’t performance. It’s precedent. GE has beaten earnings by an average of 28% over its past 12 reports. Thursday’s 9% beat, while solid, represents a significant step down from that standard.

When you consistently exceed expectations by wide margins, meeting them by smaller amounts feels like underperformance. That’s the trap GE finds itself in.

Order Book and Margins Paint Positive Picture

The operational metrics support continued growth. Fourth-quarter orders totaled $27 billion, up 74% compared to the prior year period.

That’s real demand showing up in GE’s pipeline. Orders today translate into revenue and profits tomorrow.

Operating margins expanded to 22.4% from 21.2% a year earlier. The company is squeezing more profit from its revenue base, a sign of pricing power and efficiency gains.

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

Higher spending on research and development contributed to the margin pressure. Increased production of new engines, including the GE9X for Boeing’s 777X program, also weighed on profitability.

New engine programs typically start with thinner margins. The payoff comes later through decades of aftermarket parts and service revenue.

2026 Outlook Clears Wall Street Bar

GE’s guidance for the coming year exceeded analyst expectations across key metrics. The company projects low-double-digit sales growth, operating profit between $9.85 billion and $10.25 billion, and earnings per share of $7.10 to $7.40.

Current analyst estimates call for 11% sales growth, $10.1 billion in operating profit, and $7.14 per share in earnings. GE’s guidance midpoints sit comfortably above these numbers.

The aftermarket parts and service business continues thriving. Aircraft are staying in service longer due to delivery delays from Boeing and Airbus.

Those two manufacturers are expected to deliver around 1,600 jets in 2026, up from 1,400 in 2025. More aircraft deliveries mean more engine sales for GE, even if original equipment margins run lower than aftermarket work.

Air travel demand remains strong globally. That underlying trend supports both new equipment sales and the higher-margin service business.

Valuation Reflects Lofty Expectations

GE Aerospace shares have surged 69% over the past year. The stock now commands a valuation of 44 times forward earnings, up from 36 times twelve months ago.

That’s a premium multiple by any standard. When GE kicked off its earnings beat streak in 2023, shares traded around $81. They entered this week north of $325.

Earnings have grown roughly 40% since the streak began. The stock has averaged a 2% bump following each quarterly beat during that run.

Options markets priced in a 4% move either way for Thursday’s report. Historical data shows shares have moved about 4% on average after the past four quarterly releases.

Wall Street remains bullish overall. GE has received 11 upward earnings revisions and only one downward revision in the past 90 days.

The stock has climbed 58.62% over the past year and 4.81% over the past three months, meaning significant gains were already baked into the share price before Thursday’s report.

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