GE (GE)

“Expecting this gradual normalization to continue into 2027, but we're getting to the point where it's kind of at the run rate level.”

“Overall, both for CES and for the total company, we would expect margin expansion in 2028 and beyond.”

“Beyond 2028, we should see both losses come down, and therefore the margins get better as well.”

“As we've previously said, we expect those losses to peak by the time we get into 2028.”

“We expect LEAP services margins to be in line with our total services portfolio by the time we get to 2028.”

“That higher-priced shop visits will start showing up in our revenue book, say starting 2028, 2029, that obviously helps us get LEAP back to CFM56 profitability levels by 2030.”

“Broadly speaking, our pricing approach for on spare parts catalog for this year is going to be consistent with what we did last year.”

“It really be in the early 2030s until we can look at both the LEAP-1A and LEAP-1B fleets as being fully retrofit.”

“That will give us the opportunity through the back half of this year to really work through the industrialization plan and give us a full cut-over, both with respect to the aftermarket and new make early in 2027.”

“Our repair CAGR from this year is more than 20%.”

“We do expect continuous reduction in our shop visit cost from two main things.”

“Our external channel has gone from sub 10% of our overall LEAP services portfolio to call it mid-teens right now, and we expect that to grow to, say, 30% by the time we get to 2030.”

“I think on shop visits, as you said, we are expecting the shop visits to probably grow at kind of a 25% CAGR from now till 2030, and it's all a function of the installed base that's largely out there and will continue to grow over the next couple of years.”

“No reason 2027 should diverge from that double-digit commercial services growth medium-term outlook, even as we go into next year, what will clearly be a higher trimming off point than we imagined.”

“We know we'll get the GEnx doubling between now or really between 2024 and 2030, that that installed base with our growth platforms is definitely going to grow.”

“To the extent that we can continue to make the progress with FLIGHT DECK, we think we're going to reduce that overdue, that delinquent backlog, which is a nice kicker over the next several years, not only from a revenue perspective, but to Myles' earlier question.”

“The installed base should continue to grow gradually every year at a low to mid-single-digit rate.”

“We do expect cash flow to grow here with earnings, but the conversion should normalize.”

“All in all, we feel very good, and it's great that we're driving double-digit growth for services in the second half, and that momentum should carry us into 2027, as Larry Culp said a minute ago.”

“On a year-over-year basis, the second half services revenue in our current guide is up low double-digit from a very strong second half last year.”

“We think that will begin to return to a more normal environment through the back half, going into 2027, clearly, at a more robust level.”

“We do expect a return to more modest departure growth in the second half.”

“This is expected to deliver approximately a twofold improvement in time on wing with full MRO and new make cutover expected early next year.”

“We expect a gradual return to modest departures growth in the second half, and combined with our commercial services backlog of roughly $170 billion, we remain well-positioned for services growth in 2026 and beyond.”

“We're also expanding capacity to meet growing aftermarket demand for LEAP as the installed base is expected to more than double between now and 2030.”

“Overall, 2026 is shaping up to be another strong year with high teens revenue growth and around $1.5 billion of profit and free cash flow growth, building on the momentum the business has had in the last few years.”

“We are also raising our free cash flow guidance to $8.9 billion-$9.2 billion, up $650 million from the high end of the prior guide, reflecting higher earnings and better working capital performance.”

“This reflects higher profit combined with a lower tax rate, which we now expect to be below 16.5% for the year.”

“Taken together, we are raising our EPS guidance to a range of $7.65-$7.85, up $0.35 at the midpoint from the high end of the prior guide.”

“Expectations for corporate costs and eliminations remain unchanged at $1.2 billion-$1.3 billion.”

“We expect DPT profit to be in the range of $1.6 billion-$1.7 billion, up $50 million at the midpoint versus the prior guide, reflecting drop-through from higher revenue.”

“CES operating profit is now expected to be in a range of $10.25 billion-$10.35 billion, up $400 million versus the high end of the prior guide.”

“Operating profit is now projected to be in a range of $10.55 billion-$10.75 billion, with improvement in both segments.”

“We expect DPT growth of low double digits, up from mid to high single digits.”

“We now expect commercial equipment to grow around 20%, up from mid to high teens, with LEAP deliveries up high teens from 15% previously.”

“We now expect commercial services to grow low 20s, up from mid-teens.”

“We expect CES growth of around 20%, up from prior outlook of mid-teens.”

“We're expecting overall revenue to grow high teens, up from prior outlook of low double digits.”

“Near term, orders continue to be strong, and we expect the strength in the first quarter to continue into the second quarter, with 95% of spare parts in backlog and all shop visits for the quarter already off wing.”

“We are also assuming that by the end of the summer, we are on our way back to more normal conditions.”

“You will see a gradual increase in pricing over the next few months to quarters.”

“We will end up having deliveries that will be more second-half weighted, but at this juncture, there is no reason to believe the full year will be any different than what we have communicated.”

“At this point, I think given what we know, we feel strongly about our ability to deliver the high end of the guide here in 2026.”

“As we said in our prepared remarks, we do expect DPT to be at the higher end of the guidance we previously committed, given the growth rates we are seeing and the expected drop-through.”

“Margins were a little bit light in the first quarter largely because equipment grew more than the aftermarket, but that mix should improve as we go through the year.”

“For DPT, you saw our revenue growth in the first quarter. We are expecting high-teens revenue growth for the full year.”

“So LEAP margins improving and 9X headwinds peaking in 2028—beyond that is when we expect both accelerated profit and margin expansion in the business.”

“9X losses should also peak by the time we get to 2028, given that we are driving a 50% production cost reduction in 9X.”

“We expect LEAP margins to approach overall CES levels of service profitability in the next couple of years.”

“Put all that together, and we expect flattish margins for the year for CES.”

“For the full year, we expect deliveries to be up 15%.”

“We are not baking that in for the full year—full year, we are expecting service margins to be flat—but it is a good start to the year.”

“That gets us closer to two thirds to three fourths of the growth being in the first half of the year.”

“For the current year, as you think about the margins, we baked in kind of flattish margins for the year.”

“given the continued momentum we see with our suppliers and our own operations, that is something that we should deliver on in time, regardless of the demand environment.”

“we do expect the LEAP service margins to approach overall CES service margins by the time we get into the 2028 time frame.”

“This year, we expect the number of repairs that we develop on LEAP to double over what we developed last year, which helps reduce the cost of the shop visit”

“Yeah, Scott, on LEAP, the services business is trending really nicely. We are expecting a further improvement this year on margins.”

“As we get into 2027, we have already assumed in our prior outlook that retirements increase to 3% to 4%.”

“Our guidance is based on full-year departures growth of flat to low single digits and is underpinned by the following assumptions: fuel prices remain elevated above current levels through the third quarter and decrease to current levels by year-end; a near-term impact from fuel availability in certain geographical regions; a global reduction in GDP growth impacting air travel demand.”

“free cash flow of $8 billion to $8.4 billion for total company.”

“EPS of $7.10 to $7.40”

“profit of $9.85 billion to $10.25 billion”

“we are maintaining our guidance across the board, and as Larry mentioned, given our strong start to the year, we are trending towards the high end of the range of low double-digit revenue growth; profit of $9.85 billion to $10.25 billion; EPS of $7.10 to $7.40; and free cash flow of $8 billion to $8.4 billion for total company.”

“We are also maintaining segment guidance for both CES and DPT, with a similar trend towards the higher end.”

“Given the macro uncertainty though, with our strong start to the year, we are trending toward the high end of that range.”

“Overall, we expect a limited impact on services revenue and profit in 2026, holding our full-year guidance across the board.”

“This includes a low double-digit decline in the Middle East for the year with modest reductions to other regions.”

“As a result, we are reducing our full-year departures outlook from mid-single-digit growth to flat to low single-digit growth.”

“To get to a higher shop visit number—that is not factored into our guidance. What we will need to see is better material flow through than what we have currently factored in, to burn some of that delinquency that exists on both spare parts and the shop visit side. Back to your point, that is when we would take our services guidance above where we have it, around $4 billion of growth this year.”

“If you see any impact here in the second half of the year, it is going to be a push-out of demand versus a disruption.”

“However, as we get into the second half, we are taking a more measured view given the evolving environment and have included the potential impact from deceleration in spare parts growth, lighter work scopes, delayed spare engine shipments, and reduced billings within our guidance.”

“Both CES and DPT expect above their respective full-year guides.”

“Total working capital AD&A last year was a half a billion net headwind, expect slightly less this year.”

“For '26 expect less contract asset favorability this is getting offset here with slower inventory growth.”

“On cash flow, Noah, nothing abnormal in 26.”

“From shop visit perspective, ranges 2,300 to 2,400 through 2028 sets better expectations. Expect no big decline come 2030.”

“Retirements in 2025 ended up at about 1.6%, in line with 2024, balance '26 a little better, expecting slightly better at 2% compared to two to 3% range given in July.”

“back in July when we gave 2028 guidance, expected around 21% margins in '28. We got there last year, jumping off higher point. Margin profile maintained into 2026.”

“we have opportunity to deliver on the $11.5 billion operating profit targeted for 2028. Potentially do better.”

“Despite that, expect margins to be flattish in 2026. Feel good about trajectory.”

“For '26, as we previously said, we are gonna ship more engines in '26, and the volume continues to grow. With that, our losses on the 9x programs will double year over year.”

“yes, we expect LEAP OE to be profitable in 2026 as per our prior plans.”

“We're expecting double-digit removals this year from engines that have already flown.”

“that puts CFM shop visits in the 2,300 to 2,400 range between 2026 and 2028.”

“As we think about 2026, we expect retirements to be in the 2% range.”

“Overall, we expect another year of conversion solidly above 100%.”

“We continue to expect CapEx at roughly 3% of sales.”

“Interest expense is expected to be roughly $900 million.”

“The balance will be from a marginal improvement in the tax rate to below 17% and a reduction of 18 million shares from our previously completed and announced capital allocation actions.”

“Corporate costs and eliminations are up year over year to $1.2 billion to $1.3 billion from lower interest income, AI investments, and higher eliminations from internal BAT growth.”

“LEAP internal shop visits are expected to grow 25%.”

“This includes internal shop visit revenue and spare parts revenue, both up mid-teens from low double-digit engine removals combined with higher work scopes and price.”

“In '25, LEAP parts certified for repair increased 20%, and we expect continued growth in '26.”

“We expect these investments will roughly double LEAP's internal capacity.”

“With the LEAP installed base expected to roughly triple between '24 and '30, we're expanding capacity across our global MRO network to support aftermarket demand.”

“We continue to convert this into cash, expecting to generate more than $20 billion of cash between '24 and '26 to reinvest in our future, including in US manufacturing to support both our commercial and defense customers.”

“We expect to deliver mid-teens revenue growth between '24 and '26 compounded and $10 billion of profit in '26 two years earlier than our outlook has been.”

“we think we will, perhaps not in line with the 40% bump we saw from our prior suppliers last year on a full-year basis, I think we'll be able to satisfy that demand better than we did in 2025.”

“Now as we think about the fourth quarter, we typically have a seasonal step down in our third quarter to fourth quarter revenue, largely driven by spare parts because you don't expect the same level of improvement on material availability, a little bit of seasonality in demand.”

“And as we look at the fourth quarter, our backlog still remains strong, 90% of the spare parts that we need to ship in the fourth quarter are in the backlog, which is 15 points higher than where we have been historically.”

“We are also raising our free cash flow guidance to $7.1 billion to $7.3 billion, up $500 million at the midpoint, primarily from higher earnings.”

“Taken together, we are raising our EPS guidance to $6 to $6.20, up $0.40 at the midpoint from the prior guide.”

“Additionally, we are improving our interest expense and tax rate outlook for the year and now expect interest expense of approximately $850 million and tax rate of 17.5%.”

“Corporate costs and eliminations are expected to be roughly $1 billion.”

“We expect DPT profit to be in the $1.2 billion to $1.3 billion range, up $50 million at the midpoint versus the prior guide, reflecting year-to-date performance from improved deliveries.”

“CES operating profit is now expected to be in a range of $8.45 billion to $8.65 billion, up $450 million at the midpoint from prior guide.”

“Operating profit is now expected to be in the range of $8.65 billion to $8.85 billion, up $400 million at the midpoint from the prior guide.”

“We now expect DPT growth of high single digits, up from mid- to high single digits previously.”

“We continue to expect equipment to grow high teens to 20%.”

“This is driven by higher services revenue, which we now expect to grow low to mid-20s, up from high teens.”

“At CES, we now expect growth of low 20s, up from our prior outlook of high teens.”

“We expect revenue to grow high teens, up from our prior outlook of mid-teens.”

“Based on this progress, we now expect to grow LEAP deliveries more than 20% for the full year, up from our prior outlook of 15% to 20%.”

“But I think net-net, we're more or less in line with the '28 framework we talked about back in July with a lot of good tailwinds in terms of the demand environment and clearly, operational momentum building with FLIGHT DECK.”

“I think with the introduction of the durability kit, we are very confident of getting to CFM56 levels of performance on LEAP-1A, and then soon on 1B as we look forward through 2028.”

“As we think longer term for the year, we expect LEAP external shop visits to be kind of in the mid-teens, slightly above that range. And as we project that to 2030, we expect that to be 30%, right?”

“So you put all that together, productivity is a plus, but we're facing inflation. We have the 9X losses. So we expect kind of margin expansion opportunities to be limited here.”

“And we do expect 9X losses to kind of double on a year-over-year basis or more than double on a year-over-year basis as we think about '26.”

“And then as we get into -- as you think about specifically on the '26 growth ... we expect, call it, 2,000 LEAP engine shipments and then incremental 9X shipments here because our volume assumptions on 9X have not changed since we were together back in July.”

“And then as we get into -- as you think about specifically on the '26 growth, we don't expect a repeat of the '25 performance. We don't expect '25 growth to be -- '26 growth to be kind of at the '25 levels, but it will start normalizing towards our double-digit levels that we had projected over the medium term.”

“And then the work scopes on wide-body, low single-digit kind of net price increase that we are expecting, which seems reasonable.”

“As I said in response to Seth's question, the number of engines that need a shop visit is projected to be up double digits in '26, just based on the number of cycles that they've already flown.”

“So I do expect this kind of difference between departure growth and spare parts demand to continue for a while, just given everything I've said, plus the engines that are going to come off wing.”

“As we see us ourselves to 2030, we expect this 30% year-over-year internal shop visit growth to continue, right?”

“We're well positioned to ramp further as we go into 2026.”

“with LEAP's fleet size expected to triple by 2030.”

“We've said, previously we'd be up 15% to 20%, no change in that outlook.”

“So on financially, we've always targeted the program to breakeven this year, and that's on track.”

“which are already certified and set to enter production in the second half of 2025 further enhancing HPT blade producibility.”

“So we do expect a couple of hundred million dollars of profit headwind in '25.”

“I don't think we've got a tremendously different perspective on the second half here today than we did 90 days ago, right? ... We've said for the full year, we think we'll end up being up low single digits, which would suggest a flattish, slightly up back half.”

“And overall, it should be another year of more than $1 billion of profit growth and $l.25 billion at the high end.”

“But we should still see strong year-over-year profit growth in the second half at the midpoint of the guide.”

“With this raise, we expect to grow operating profit by over $1 billion for second year in a row with free cash flow conversion remaining solidly above 100%.”

“We now expect free cash flow to be in a range of $6.5 billion to $6.9 billion, up from $6.3 billion to $6.8 billion, driven by our improved profit outlook.”

“Assuming that reciprocal tariffs are implemented after the current pause, we still expect the net impact of tariffs to be roughly $500 million in 2025, which we are offsetting through cost controls and pricing actions.”

“And we now expect adjusted EPS of $5.60 to $5.80, growing over 20% at the midpoint year-over-year, reflecting higher operating profit and a reduced tax rate.”

“For total operating profit, we now expect to be in a range of $8.2 billion to $8.5 billion, up $350 million at the midpoint versus our April guide from improved services outlook.”

“Our DPT expectations are unchanged from mid- to high single-digit revenue growth.”

“This supports total CES revenue growth of high teens.”

“Therefore, we are increasing revenue growth expectations for commercial services to high teens and commercial equipment to high teens to 20%.”

“We now expect total revenue growth of mid-teens, up from low double digits.”

“Overall, material input improvement has resulted in higher inventory as we accelerate output and grow LEAP deliveries 15% to 20% here in 2025.”

“For 2025, we're still planning for low single-digit departures growth, taking a more conservative view on the second half.”

“And I think that will continue to improve as we get into the outer years, profit equals CFM56 margins, profit equals CFM56 [dollars] by 2030.”

“We expected OE to break even next year. That's on track.”

“Now subject to Board approval, we're increasing that to $24 billion, including about $19 billion of buybacks and roughly $5 billion of dividends at roughly 30% of net income.”

“This gives us a clear road map to sustain cash conversion at or above 100% through '28.”

“As material availability and stability improve, we expect inventory turns to begin recovering. We see a clear opportunity to improve at least 1 full turn from '24 to '28.”

“These actions give us confidence that we can navigate the impact from CFM56 retirement and that LEAP will not only equal CFM56 profit by the end of the decade, but the profitability levels will continue to improve beyond that.”

“For 2028, we're raising our outlook for profit and free cash flow by $1.5 billion versus our prior view driven by strong operating and commercial services performance.”

“So we expect the program to get profitable as we get into the 2030s.”

“So we do expect the losses to be a few hundred million dollars higher in '28 versus where we are in '25.”

“We expect to take about 30% of the cost out by the time we hit the 50th unit, another 30% out by the time we get to the 250th engine.”

“And then our -- as we said, as we were walking through the profit drivers for '28, we are expecting that overall, given what we've outlined in pricing this morning that the pricing will cover inflation.”

“So we're really not expecting any let off in the installation that we have been seeing here over the last couple of years. So we're expecting a consistent environment from where we are.”

“So the number of engines coming off wing, that is going to be up in '25, that's going to be up in '26.”

“And overall, I would say the LEAP service margins should start approaching our overall service margins by the time we get into that time frame.”

“So we expect about 30% off the shop visits to be external by the time we get to 2030.”

“That leads to about a 6% to 7% increase in installed base growth right over where 19,000 to 20,000 narrow-body aircraft that are flying today.”

“Beyond 2026, we expect to return at least 70% of free cash flow annually through a combination of dividends and buybacks.”

“Next, we have a bias towards returning cash to shareholders and expect we'll return more than 100% of free cash flow to shareholders through 2026.”

“For GEnx, we expect 1.5x increase over the same period.”

“Take LEAP, for example. Billings are expected to grow 2.5x between '24 and '28.”

“Our goal is to more than double the number of LEAP specific repairs by '28.”

“We continue to expect approximately 70% of LEAP shop visits to be performed by CFM, split equally between our JV partner, Safran and us.”

“First, we expect external shop visits to grow from 10% of the total in '24 to 15% in '25 to 30% by the end of the decade.”

“Overall, the LEAP installed base will approximately triple by the end of the decade with internal shop visits growing roughly at the same pace.”

“We now expect internal shop visits for GE90 to grow through '28, representing approximately 100 incremental visits compared to our outlook last March.”

“With this shop visit outlook, we expect CFM56 revenue peaks in '28, underpinned by increased work scopes and pricing.”

“And we expect a gradual decline in volume post '27 to roughly 2,000 shop visits by the end of the decade.”

“Increased shop visit activity, which we expect to peak in '27 with approximately 600 additional shop visits through '28 compared to our outlook last March.”

“we expect retirements of around 1.5% in 2025, rising to 2% to 3% in 2016 before normalizing at 3% to 4%.”

“Altogether, we expect services profit to grow over 50% between '24 and '28 with contributions from both foundational and current generation programs.”

“And even with Leap shop visit volume growing at a 25% CAGR through 2030, we expect CES margins to stay at current levels as we are offsetting the impact of LEAP with better performance on other platforms.”

“Wide-body profit is expected to grow more than 40% supported by installed base growth and higher work scope, shop visits for both GE90 and GEnx.”

“And by the end of the decade, we expect LEAP and CFM56 profit to reach parity, reflecting the maturity and the scale of the LEAP program.”

“Narrow-body profit is expected to rise over 70%, primarily from LEAP with CFM56 continuing to contribute meaningfully.”

“We anticipate wide-body services revenue will grow at high single-digit CAGR through 2030, including GEnx at a low double-digit CAGR.”

“As a result, we now expect narrow-body revenue to grow at a low double-digit CAGR and '28 revenue to be approximately 15% higher than our expectations last March.”

“Overall, these actions will add more than $3 billion of profit between '25 and '28.”

“And we are leveraging FLIGHT DECK to drive 2 points of productivity annually as we reduce waste by lowering the nonproductive and overtime in our shops and increased output per employee.”

“Given ongoing supply chain constraints, we expect material inflation to stay elevated, but pricing actions should more than offset that impact.”

“We expect incremental GE9X losses of a few hundred million dollars in '28 versus '25 given higher volume.”

“This growth plus benefits from share buyback and a lower tax rate will drive mid-teens EPS growth, and we expect to convert 100% of net income to free cash flow reaching roughly $8.5 billion of cash by '28.”

“supporting 25% growth in wide-body revenue per shop visit, favorable mix in defense with rising international defense shipments, mid-single- digit growth or low single-digit net price increases, higher revenue will support double-digit profit growth, with profit reaching approximately $11.5 billion in '28.”

“We now expect double-digit growth on an annualized basis between '24 and '28.”

“With this backdrop, we are expecting that the improvement in '25 guidance will carry through to our '28 outlook.”

“All in, this represents operating profit growth of more than $3 billion compared to our updated '25 guide driven by commercial services.”

“And we expect to generate substantial free cash flow of at least $8.5 billion with conversion around 100%.”

“Operating profit is expected to reach approximately $11.5 billion with margins expanding to more than 21%.”

“We expect to drive meaningful operating leverage over that period with adjusted EPS reaching of roughly $8.40.”

“We expect to sustain strong adjusted revenue growth at a double-digit compounded rate, which will be supported by robust demand for services and equipment.”

“We're actively investing to support a targeted 2035 entry into service.”

“and we also expect will result in a quieter engine than today's LEAP.”

“Overall, we expect to grow internal and external capacity by approximately 40% by the end of the decade.”

“And finally, we're expanding capacity with the LEAP installed base expected to roughly triple and GEnx to roughly double by 2030.”

“Internationally, we're expecting faster growth than in the U.S., largely in response to rising global tensions and the evolving geopolitical landscape.”

“But I think as we look forward, we're probably looking at something on a mid-single-digit basis at a gross level low single digit on a net basis, at least with respect to spare parts.”

“We're encouraged by our strong start which combined with the actions we're taking puts us well on our way to achieving our full year guide.”

“We're already seeing improvement in our overall output through April and remain confident will accelerate in 2025 and longer-term.”

“We drove significant improvement in material input in February and March, giving us confidence that we will accelerate output in the second quarter.”

“And as we sit here for the second quarter, we do expect to have a strong second quarter on cash. It should be sequentially up from first quarter and we expect more than 100% conversion for the second quarter.”

“For CFM56, we continue to expect kind of mid-single-digit shop visit growth, which will drive the CFM56 revenue.”

“We expect the external channel to -- this year to be about 15% of our total shop-visit revenue versus kind of 10% last year.”

“We expected more than 30% shop visit growth on LEAP.”

“Now that typically translates into kind of mid-single digit at the overall services level for us after sharing with the revenue share partners and everything else.”

“And overall, as we sit here today, Sheila, we feel better about the year even with the tariffs, even with the macroeconomic uncertainty that we did back in January.”

“So if you put all that together, we should still see year-over-year profit growth in the second half should be a -- still be a very, very good year for us.”

“But overall, we are holding the low double-digit spare parts growth for the year, just given the start that we've had.”

“And this will be primarily driven by Services, and we expect similar revenue growth in Services as we did in the first quarter.”

“And what we are thinking for second quarter right now, given where we are in April, is that the GE Aerospace revenue growth to be better than what we delivered in first quarter and the profit dollars for the second quarter to be flat to sequentially up from first quarter and decently up on a year-over-year basis.”

“So -- and as we think about the second quarter, to your question, we do expect that momentum to continue into the second quarter.”

“CES is on track for another year of significant growth, and we expect continued solid performance at DPT.”

“Overall, we continue to expect low double-digit to mid-teens services growth.”

“We expect minimal impact on internal shop visit revenue which represents roughly 60% of our total services revenue given our backlog, pent-up demand, and limited risk to shop visits pushing out.”

“We are maintaining our full year spare parts guidance of low double-digit growth given the stronger start to the year and nearly 90% of spare parts in backlog for second quarter.”

“We now expect low single-digit full-year departure growth, down from mid-single-digits in January.”

“We are maintaining our R&D spend for the year.”

“From there, we expect to primarily mitigate this remaining $500 million through SG&A cost controls and price increases.”

“As Larry mentioned, we expect roughly $500 million of cost after our operational actions to minimize the tariff impact.”

“Therefore, we continue to expect low double-digit revenue growth, profit of $7.8 billion to $8.2 billion, EPS of $5.10 to $5.45, and free cash flow of $6.3 billion to $6.8 billion.”

“Given our operational and financial strength, we continue to expect to deploy over $8 billion of cash to shareholders in 2025 through dividends and buybacks.”

“critical additional benefits that will support achieving the 15% to 20% growth in LEAP deliveries we expect in 2025.”

“With those actions, we expect to reduce the tariff costs to roughly $500 million.”

“So while the price -- we are implementing price increases for the shop visits and the portfolio accretion is at a higher price, that has not really showed up in our P&L just yet. So that will take another couple of years before it starts showing up.”

“Additionally, LEAP remains an important growth area with the fleet expected to more than double by the end of the decade.”

“But again, I think we know that it will take some time for that to impact us, not that we will be immune for the calendar year, but when you look at past downturns, it has taken two, three, four quarters, sometimes longer for that departure slowdown to really impact our activities.”

“We are preparing for tariffs that could persist through year end with 10% tariffs remaining in place and then reciprocal tariffs resuming after the 90-day pause.”

“But again, just to reiterate, we are going to have a strong bias toward shareholder returns.”

“I think we will stand by our capital allocation framework that we shared almost a year ago now with respect to how we think we will deploy not only our cash flows and our cash reserves in '25, but going forward.”

“But as we work those, I think we sit here fully expecting to be able to deliver better labor productivity in '25 and certainly from there.”

“But again, it won't be a demand challenge for us in 2025, we believe.”

“We're well positioned to deliver another year of substantial growth and deploy over 100% of our free cash flow to shareholders.”

“These actions, combined with our close alignment on demand schedules, will enable higher material inputs in 2025 and, importantly, beyond.”

“As we go from 4Q to 1Q, profit could be flat to be slightly down, but strong growth on a year-over-year basis and margins should expand in the quarter as well.”

“Our profit will be flat, maybe sequentially down a little bit versus what we did in the fourth quarter.”

“So, if you step back and look at the Company overall, we expect overall full-year revenue for the first quarter to line up with what we are expecting for full year for the Company.”

“We expect that continuously sequential improvement as we go through the year.”

“I think that will continue to be the case in 2025. There's no step function improvement necessarily sitting out there on the HPT blade.”

“But expect overall AD&A outflow to be at the same level, maybe marginally higher.”

“I think we are well aligned to support both of them as they step up production this year.”

“And revenue for the quarter for CES should be kind of in line with what we're expecting for full year.”

“And the biggest driver of profit growth within CES is the drop through that we're getting from the services revenue that we expect to be up about $3 billion up year over year at the midpoint of the guide.”

“The balance will come through a reduction in the tax rate, which is expected to improve to below 20%, and the benefit from share repurchases, including the $5 billion executed in 2024 and an additional $7 billion expected in 2025.”

“We also expect a lower spare engine ratio.”

“Stepping back, between 2023 and 2025, taking the midpoint of our guide, we expect to grow profit $2.5 billion and free cash flow nearly $2 billion over this two-year period.”

“And given the strength of our balance sheet, we're increasing our share repurchases to $7 billion and planning to raise our dividend by 30%, subject, of course, to Board approval.”

“But that's the trajectory that the program is on that, sometime in -- late towards the end part of this decade, LEAP and CFM are delivering the same amount of profit for the Company.”

“So, we expected LEAP to be kind of in CFM56 levels by 2028.”

“LEAP services became profitable in 2024, and the program becomes breakeven in 2025, with OE following a year later in 2026.”

“But I think we're poised, I think, as Rahul just touched on to deliver good growth going into 2025.”

“I'm confident our actions will enable us to increase output meaningfully into the fourth quarter and 2025.”

“Looking ahead, we're poised to continue to deliver meaningful profit and free cash flow growth in 2025 and beyond, combined with our capital allocation strategy, including returning approximately $25 billion of available cash to shareholders will drive compounding shareholder returns.”

“All in, we are positioned to deliver significant revenue, profit and free cash flow growth in 2024, and that provides us a solid foundation for '25.”

“We are also raising our free cash flow guidance to $5.6 billion to $5.8 billion, up $250 million at the midpoint, primarily from higher earnings.”

“We are raising our adjusted EPS guidance to $4.20 to $4.35, up $0.20 at the midpoint from the prior guide from improved profit and lower tax rate.”

“Recall what we said last quarter relative to the CFM56 utilization, it will be higher for longer.”

“So that means that spare part sales for LEAP should grow over time.”

“On the LEAP side, I think that is definitely shaping up to be a lot better than what we expected at the beginning of the year.”

“And we do expect that, as we get into '25, our profit should grow faster than revenue, and that should drive continued margin expansion on the DPT segment.”

“But they'll get better in the fourth quarter, and will continue to improve as we work past these supply chain challenges.”

“That will unlock capacity, which will help us in 2025 in earnest as well.”

“We expect inputs to increase again in the fourth quarter, supporting a sequential step-up in output.”

“We now expect a tax rate of around 20%, lower than our prior expectation of low 20s.”

“Corporate costs and eliminations are now expected to be around $850 million, down from below $900 million previously and $150 million reduction year-over-year.”

“We expect DPT to be at the lower end of the current profit range of $1 billion to $1.3 billion.”

“CES operating profit is now expected to be $6.6 billion to $6.8 billion, up $300 million at the midpoint from the prior guide, reflecting improved services mix.”

“Operating profit is now expected to be in a range of $6.7 billion to $6.9 billion, up $150 million at the midpoint in the prior guide, implying over 200 basis points of margin expansion year-over-year.”

“We also continue to expect DPT growth of mid-to-high single digits, in line with the year-to-date performance of 6% growth.”

“This includes continued sequential growth in LEAP deliveries in the fourth quarter, but the full-year will now be down approximately 10% year-over-year.”

“At CES, we continue to expect low-double digits to mid-teens growth.”

“the shop visits that were in the '25 to the '28 time frame have now moved out later in the decade... they've kind of moved out of the '25 to the '28 time frame to more '28 to '31.”

“On the NX side, the shop visit are roughly, on a volume basis, we're expecting that to be flat over the next three to four years.”

“So Gautam, as we said, I think, on the last earnings call, we had expected the peak of shop visits to be in 2025 and then start declining in '26 and '27, right? Given what we are seeing now, we still expect the peak of shop visits in '25, but now to stay at that level to '27 and then start declining from that point on, again, at a gradual pace, right?”

“And we'll move past the peak losses towards later in the decade and the program should be profitable by 2030.”

“And as we shared at Investor Day, we expect about 30% of the cost to come out by the 50th engine, an additional 30% as we get to the 250th engine.”

“With LEAP's fleet size projected to double by 2030, we're expanding capacity to support aftermarket growth.”

“All in, GE Aerospace is positioned for significant revenue, profit and free cash flow growth with strong conversion in 2024.”

“program should break even next year.”

“we are expecting LEAP performance to be in line with CFM56 performance on the A320s by the end of the year.”

“So we expected LEAP to be profitable here in 2024 and the program to be breakeven in 2025.”

“if you look at our low to mid-teens guidance on shop visits, that would imply that shop visits will be closer to high teens in the second half of the year on a year-over-year basis.”

“And then it won't be as much of a headwind as it was last year in the second half of the year.”

“You'll note that we are adjusting our outlook for LEAP deliveries this year. On a full-year basis, we now think we will be somewhere between flat and up 5%, obviously lower than where we thought, but still showing modest growth.”

“While we still expect to reduce working capital for the year, the improvement is expected to be lower given the impact of supply chain challenges to inventory.”

“We are also raising our free cash flow guidance to $5.3 billion to $5.6 billion with above 100% conversion of net income given profit growth.”

“Operating profit is now expected to be in a range of $6.5 billion to $6.8 billion, up $250 million at the midpoint from prior guidance with margin expansion year-over-year.”

“Consistent with prior guidance, we expect DPT growth of mid- to high-single digits.”

“We continue to expect CES services to grow mid-teens, putting overall growth of CES at low-double digits to mid-teens.”

“We now expect CES equipment revenue to be up high single to low-double digits from prior guidance of up high teens.”

“Dedicated freight departures are now expected to be up mid-single digits versus a prior expectation of low-single digits.”

“We continue to expect to be up high-single digits for the full-year.”

“we do expect that shop visit is probably plateau at that 25 level for maybe another couple of years and then start declining.”

“All in, we expect to grow operating profit to approximately $10 million in 2028 and generate free cash flow in excess of net income, creating compounding returns.”

“But overall, second half profit growth on a year-over-year basis will be lower than the profit growth that we'll see in the first half.”

“keep in mind that the equipment growth will ramp in the second half of the year. Equipment growth will also include 9X shipments and the services mix will skew back towards the shop visit growth, which we still expect to be maybe low to mid-teens for the year.”

“And overall, for first half, we are expecting about low double-digit revenue growth and about half of profit and free cash for the year, so far more linear year than we've done in the past.”

“So we do expect the benefit from the higher freight departures to be in our financials. The question is probably not as much in 2024, more in 2025.”

“And on free cash flow, we expect higher profit to flow through to cash, delivering more than $5 billion with conversion well above 100% of net income.”

“In DPT, we continue to expect mid to high single-digit revenue growth, primarily driven by equipment growth.”

“In services, we continue to expect mid-teens revenue growth with shop visit output growing faster than spare part sales.”

“We continue to project at least low-double digit revenue growth.”

“We expect passenger traffic growth in high single-digit range for the year, a slight improvement.”

“We continue to expect departure growth to moderate throughout the year.”

“For the year, we now expect departures to grow high single-digits.”

“Post the GE Vernova spin-off, we expect to incur roughly $300 million for the remaining wind-down of GE corporate office and close to $250 million to set up standalone infrastructure for GE Aerospace.”

“And for the future, we are advancing the technology building blocks that will define the future of flight with more than $2 billion of R&D spending this year.”

“We also recently announced we're investing more than $650 million in both our manufacturing facilities and our supply chain this year, reflecting our commitment to strengthening quality and increasing production to better support our customers' long-term needs.”

“In the quarter, GE CFM departures were up low double digits, and we are revising our expectations upward for the year.”

“We're raising our full year operating profit guidance and see a path to our $10 billion operating profit target by 2028.”

“we would see a migration from CSAs to T&M contracts with about 60% of the shop visits done in-house here between Safran and GE Aerospace, and the remaining 40% being done by our channel partners.”

“We do expect, Scott, that as we go through the year, as you go through the decade, I should say, that there will be more T&M contracts.”

“Now, as we get to an apples and apples basis... we expect to see real EBITDA growth that will drive free cash flow, whether from low single digit EBITDA growth to the high end of the mid-single digit EBITDA range that we're talking about, in addition to working capital, continuing to be a source of cash that drives us up towards that $700 million to $1.1 billion, a positive free cash flow at turnover.”

“As you look forward to ‘25, the biggest driver to profit growth between ‘24 to ‘25, will be the benefit from top line improvement.”

“And for Power, typical seasonality with low single digit growth, some margin expansion year-over-year in the first quarter.”