GE Aerospace (GE) is printing money right now, and Thursday's fourth-quarter earnings report made that abundantly clear. The aerospace giant posted total revenue of $12.7 billion, up 18% from last year and comfortably ahead of the $11.2 billion analysts were expecting. Adjusted earnings per share came in at $1.57, beating the $1.43 estimate, while continuing EPS on a GAAP basis hit $2.31, up 32% year over year.

The real star of the show? Cash generation. Operating cash flow surged 59% to $2.1 billion, and free cash flow climbed 15% to $1.76 billion. For the full year, GE Aerospace achieved something finance nerds dream about: free cash flow conversion above 100%. That means the company turned more than every dollar of earnings into actual cash. The balance sheet looks solid too, with $12.4 billion in cash against $20.5 billion in borrowings.

A Backlog That Keeps Growing

Chairman and CEO H. Lawrence Culp, Jr. wasn't shy about celebrating the results. "With a strong fourth quarter, GE Aerospace delivered an outstanding year as revenue grew 21%, EPS was up 38%, and free cash flow conversion exceeded 100%," he said. "Our performance demonstrates how FLIGHT DECK is taking hold as we accelerated services and equipment output to fulfill our growing backlog of roughly $190 billion."

That $190 billion backlog is the real story here. Airlines are spending aggressively on engine upkeep and new equipment, and GE is the primary beneficiary. Total orders for the quarter jumped 74% year over year to $27 billion, with strength across both commercial services and defense. Commercial Engines & Services orders increased 76%, while Defense & Propulsion Technologies saw orders climb 61%.

Culp added that the company enters 2026 "with solid momentum to build upon these results and are well positioned to create greater value for our customers. This supports another year of substantial EPS and cash growth, and I'm confident our team will deliver."

Boeing Delays Aren't Slowing Them Down

During the earnings call, Culp addressed concerns about Boeing's (BA) 777X program delays, noting they haven't impacted near-term GE9X engine shipments. He insisted there's "no talk of a slowdown" in airline or defense demand, pointing to robust order momentum, persistent input cost inflation, and confidence in the company's pricing power and aftermarket strategy. Translation: demand is strong enough that GE can keep raising prices without scaring customers away.

Breaking Down the Segments

Commercial Engines & Services revenue rose 24% in the fourth quarter to $9.5 billion, though the operating profit margin dipped 420 basis points to 24.0%. That margin compression reflects the cost of ramping up production to meet that massive backlog. Commercial engine deliveries jumped 25% for the full year, including a record 1,802 LEAP engines, up 28%. The company expects LEAP deliveries to increase another 15% in 2026.

Defense & Propulsion Technologies saw revenue increase 13% to $2.8 billion, with an operating profit margin of 8.9%, down 70 basis points. The segment's book-to-bill ratio hit 2.2x, meaning GE is booking more than twice as many orders as it's delivering, which bodes well for future growth.

What's Ahead for 2026

For 2026, GE Aerospace guided adjusted EPS to $7.10-$7.40, essentially in line with the $7.12 consensus estimate. Free cash flow is expected to hit $8.0-$8.4 billion, with an adjusted effective tax rate below 17%. The company isn't planning any debt repayment this year, opting instead to refinance maturities as they come due.

Operating profit is projected at $9.85-$10.25 billion. On the revenue side, Commercial Engines & Services should grow at a mid-teens rate, while Defense & Propulsion Technologies is expected to increase at a mid-to-high single-digit pace.

For the individual segments, management guided Commercial Engines & Services operating profit to $9.6-$9.9 billion, Defense & Propulsion Technologies operating profit to $1.55-$1.65 billion, and corporate costs to $(1.2)-$(1.3) billion.

Stock Movement: GE Aerospace shares were down 0.25% at $317.70 during premarket trading on Thursday. The stock is approaching its 52-week high of $332.79, suggesting investors are pretty happy with what they're seeing despite the modest premarket dip.