3. GE Aerospace (NYSE:GE)
Number of Hedge Fund Holders as of Q4: 101
XN Exponent Advisors LLC’s Equity Stake: $186.20 Million
GE Aerospace (NYSE:GE), headquartered in Evendale, Ohio, is a leading aircraft engine supplier and the legal successor to the original General Electric Company. On January 23, 2025, GE Aerospace released its fourth-quarter and full-year 2024 financial results, highlighting significant growth in key performance metrics. The company reported a 46% increase in total orders for the quarter, reaching $15.5 billion, while total revenue grew by 14% to $10.8 billion. Profit margins also expanded, with a GAAP margin of 21.2% and an EPS increase of 62% to $1.75. Cash from operating activities rose 5% to $1.3 billion, demonstrating strong financial momentum.
For the full year 2024, GE Aerospace (NYSE:GE) recorded total orders of $50.3 billion, marking a 32% year-over-year increase. Revenue reached $38.7 billion, reflecting 9% growth, while the company maintained a profit margin of 19.7%. Despite a 27% decline in EPS to $6.09, cash from operating activities remained strong at $5.8 billion. CEO H. Lawrence Culp, Jr. emphasized the company’s solid financial performance, highlighting the role of strong market demand and operational efficiency in driving order growth and free cash flow. He also noted the company’s transition into an independent entity and its strategic focus on innovation and efficiency through FLIGHT DECK, a proprietary lean operating model designed to enhance productivity and accelerate output.
Looking ahead to 2025, GE Aerospace (NYSE:GE) anticipates continued strong performance, projecting double-digit revenue and EPS growth, along with over 100% free cash flow conversion. The company is addressing supply chain challenges through targeted improvements, which have already resulted in a 26% growth in material input across key supplier sites. Additionally, the company returned over $6 billion to shareholders in 2024 and announced a $7 billion share repurchase plan for 2025, alongside a proposed 30% dividend increase. With these strategic initiatives, GE Aerospace (NYSE:GE) remains focused on driving long-term growth and strengthening its leadership in the aviation industry, presenting an excellent stock opportunity for investors looking for long-term value and stability in the aviation sector.
Aristotle Atlantic Core Equity Strategy stated the following regarding GE Aerospace (NYSE:GE) in its Q4 2024 investor letter:
“GE Aerospace (NYSE:GE) designs and produces commercial and defense aircraft engines, integrated engine components, electric power, and mechanical aircraft systems. The industry has high entry barriers and is concentrated among few players. Despite its cyclical nature, the demand for travel is driven by global middle-class growth. Boeing and Airbus have long order books, ensuring steady demand for engines and spare parts. The company also benefits from high-margin services for existing aircraft fleets, with services accounting for 70% of its commercial engine business. GE Aerospace serves customers worldwide.
We see GE Aerospace making significant strides in its commercial engine business, which is expected to boost future services revenue growth. Over the past five years, the company has undergone substantial restructuring and simplification, including divesting its healthcare and energy businesses. The company now operates in three segments: Commercial Engines & Services (CES), Defense & Propulsion Technologies (DPT) and Insurance. Long-term revenue guidance is for high single-digit growth, and management has a goal of $10 billion in annual operating profit by 2028, with an expected 20% annual earnings growth. Following years of restructuring, we see GE Aerospace now positioned to return capital to shareholders through dividends and share repurchases.”
