GE's stock drops as jet engine sales are still rising, but at a slower pace

By Tomi Kilgore

GE beat expectations on many earnings metrics, amid continued strength in the commercial engines business

GE's stock fell as earnings beat expectations, but the revenue outlook showed growth is decelerating.

GE Aerospace reported fourth-quarter results Thursday that beat expectations on many metrics, amid particular strength in its commercial-engines business.

The company also provided an upbeat full-year outlook, with revenue growth slowing, but still faster than Wall Street had forecast, which prompted some analysts to say the report should be well received.

But after a brief surge into record territory soon after the earnings report was released, the stock soon reversed course, as the growth in GE's biggest business - commercial engines and services - continued to decelerate.

The stock (GE) dropped 5.9% in recent midday trading, which would be the biggest one-day selloff since it tumbled 11.1% on April 4, 2025, at the height of tariff fears.

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GE reported a fourth-quarter net profit that rose 24.3% from a year ago to $2.85 billion. Adjusted earnings per share, which excludes nonrecurring items, were $1.57, beating the average analyst EPS estimate compiled by FactSet of $1.43.

Total revenue was up 17.6% to $12.72 billion, well above the FactSet consensus of $12.04 billion, as total orders jumped 74% to $27 billion.

Among GE's business segments, revenue from its commercial-engines and services business climbed 23.8% to $9.47 billion, above the FactSet consensus of $8.86 billion. Revenue from services and internal visits grew in the 30% range, while spare-parts revenue was up 25%. Orders were up 76% to $22.84 billion.

If there was a downside to the results, CES revenue growth slowed from 26.8% in the third quarter and from 30.4% in the second quarter.

For the defense and propulsion-technologies business, revenue grew 12.5% to $2.84 billion, topping expectations of $2.57 billion. Defense and systems revenue edged up 2%, as price and customer mix offset a 7% drop in deliveries, while propulsion and additive technologies revenue increased 33%. Orders were up 61% to $4.57 billion.

For 2026, the company projects adjusted EPS of $7.10 to $7.40, which surrounds the current FactSet consensus of $7.14.

And GE expects adjusted revenue growth in the low-double-digit percentage range, while the FactSet adjusted-revenue consensus of $46.51 billion implies 9.9% growth.

In 2025, adjusted revenue had increased 20.5%.

Commercial engines and services revenue is seen rising in the midteens percentage range for 2026, down from 23.9% growth in 2025, while defense and propulsion-tech revenue is projected to grow in the mid- to high-single digit range after rising 11.4% in 2025.

Analyst Robert Stallard at Vertical Research Partners acknowledged that growth is seen slowing, but because it's still better than Wall Street had forecast, he believes the stock should be "performing well."

BofA Securities' Ronald Epstein echoed those sentiments, saying the quarterly beat and upbeat outlook should be "well received by the market."

GE's stock has run up 59.1% over the past 12 months, while the S&P 500 index SPX has advanced 13.7%.

-Tomi Kilgore

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01-22-26 1211ET