Company Overview: GE Aerospace reports Q3 2025 earnings this morning before the opening bell, with analysts expecting quarterly earnings of $1.47 per share, up from $1.15 per share in the year-ago period, and consensus revenue of $10.41 billion compared to $8.94 billion a year earlier. The stock has surged 77% year-to-date, significantly outperforming the broader market, as the company capitalizes on both commercial aviation recovery and increased defense spending globally.
The company delivered a blockbuster Q2 2025 with revenue up 21% to $11 billion and raised its full-year guidance to mid-teens revenue growth, now expecting 2025 operating profit of $8.2-$8.5 billion, up from the previous estimate of $7.8-$8.2 billion. What’s particularly compelling right now is GE’s recent September announcement with Kratos Defense that they’ve begun altitude testing of the GEK800 engine designed for unmanned aerial systems and collaborative combat aircraft. This formal teaming agreement with Kratos marks a strategic push into the next generation of affordable unmanned systems and drone technology that’s becoming critical for modern defense operations.
Key Technical and Fundamental Drivers
Earnings This Morning → Critical Catalyst Multiple top analysts recently raised price targets ahead of earnings, including UBS to $321, Citigroup to $309, and RBC Capital to $300, with analysts maintaining Overweight/Outperform ratings based on 73-84% accuracy rates.
Commercial Engines Booming → 30% Q2 Growth GE’s Commercial Engines & Services division saw operating profits surge 33% in Q2 with revenue of $7.99 billion (up 30%), driven by service orders climbing 28% and equipment orders rising 26%. The commercial services backlog increased to over $140 billion, supporting multi-year growth visibility.
Defense Momentum → Drone Engine Breakthrough Defense orders climbed 24% year-over-year in Q2 with a healthy 1.2x book-to-bill ratio, while revenue grew 7% led by increases in both Defense & Systems and Propulsion & Additive Technologies units. The September Kratos partnership announcement on altitude testing for unmanned aerial systems positions GE at the forefront of collaborative combat aircraft development.
Record Backlog → $175 Billion GE now holds orders valued at $175 billion, up from $140 billion at the end of Q1 2025, landing 1,049 aircraft engine orders in Q2 alone including 860 CFM International Leap powerplants.
2028 Outlook Raised → $11.5B Operating Profit The company increased its 2028 outlook for profit and free cash flow by $1.5 billion, driven by strong operating performance and robust commercial services, with operating profit now expected to reach approximately $11.5 billion.
Market Takeaway GE Aerospace is well-positioned heading into Q3 earnings, supported by robust demand across both commercial and defense businesses. The company has beaten Wall Street’s earnings estimates for four consecutive quarters, including a notable 16.1% earnings surprise in Q2. The services division contributes roughly 70% of total revenue, providing recurring, high-margin income streams from the maintenance and support of GE’s massive installed base of commercial aircraft engines.
While the stock’s forward P/E ratio of approximately 51x is elevated, reflecting analysts’ projections of 16.9% earnings growth in 2026, the premium valuation also reflects confidence in GE’s long-term earnings power driven by its high-quality service-driven business model. Despite a $500 million expected tariff impact in 2025, the company is working to offset costs through pricing actions and operational improvements while maintaining its raised guidance.
The stock’s 14-day Relative Strength Index stands at 52.21, comfortably below the 70 overbought threshold, suggesting room to run if earnings and guidance exceed market expectations. With the Kratos drone engine partnership opening new defense markets, record commercial backlogs, and Wall Street maintaining “Strong Buy” ratings, this morning’s earnings report could provide the catalyst for the next leg higher in what’s already been an exceptional year for GE Aerospace shareholders.