GE Aerospace (NYSE:GE)

The analysis of the quarterly financial indicators reveals notable trends and fluctuations over the periods observed.

Return on Assets (ROA)

The ROA displayed a pattern of volatility beginning in early 2020, with no available data for the initial quarters of that year. Starting in March 2021, the ROA showed a declining trend, deteriorating into negative territory from -1.34% to as low as -3.28% by March 2022. This period indicates a phase of underperformance in asset utilization. Beginning in early 2023, there was a significant rebound with ROA turning positive and gradually increasing, peaking around 6.45% in September 2023. The positive trajectory continued into early 2025, stabilizing at levels above 5%, suggesting an improvement in asset efficiency and profitability.

Financial Leverage

Financial leverage ratios started high in early 2020, around 7.4 to 7.6, indicating substantial use of debt relative to equity. There was a consistent reduction through late 2021, reaching a low near 4.9. This decline suggests a deleveraging phase or a relative increase in equity financing. However, from early 2022 onward, financial leverage began to rise again, fluctuating between 5.0 and 6.7, showing a partial reversal toward increased leverage. This return to higher leverage ratios continued through 2024, indicating a renewed reliance on debt financing.

Return on Equity (ROE)

ROE followed a pattern roughly parallel to ROA but with more pronounced extremes due to leverage effects. Starting in March 2021, ROE sharply decreased, moving deeply negative and reaching a low of approximately -18.56% in late 2022, reflecting significant losses to equity holders during this period. From early 2023, ROE improved dramatically, rising to over 35% by late 2023, indicating strong returns on shareholder investments. Despite a drop to around 11.77% in early 2024, the ROE rebounded robustly afterward, maintaining high levels exceeding 30% into early 2025. This volatility highlights the sensitivity of equity returns to the company’s operational performance and financial leverage changes.

In summary, the company experienced a period of financial stress and declining profitability through 2021 and early 2022, evidenced by negative returns and deleveraging. Following this, a notable recovery phase took place, characterized by improving asset efficiency, increasing returns to equity holders, and an uptick in financial leverage, signaling renewed confidence and possibly strategic repositioning in its financial structure.

The financial data over the reported quarters indicates notable fluctuations and recovery trends in key performance metrics.

Net Profit Margin

The net profit margin began with negative values from March 2021 through December 2022, reaching a low point of approximately -9.17% in March 2022. This phase reflects a period of sustained losses or low profitability. From early 2023 onward, a consistent upward trend is observable, moving from near breakeven (0.31%) in March 2023 to a peak of 19.41% by March 2025. This suggests a marked improvement in profitability and operational efficiency over the latter periods.

Asset Turnover

Asset turnover ratios were relatively stable around 0.29 to 0.3 initially, then showed gradual improvement starting in late 2020 through 2023, peaking at approximately 0.43 in mid to late 2023. This increment suggests enhanced efficiency in using assets to generate revenue. However, from late 2023 onward, the ratio declined to 0.29 by March 2025, indicating a potential reduction in asset utilization efficiency or fluctuations in sales relative to assets.

Financial Leverage

Financial leverage ratios started high in early 2020 around 7.4 and exhibited a decreasing trend till late 2021, culminating near 4.9. This decline indicates reduced reliance on debt or liabilities relative to equity during that period. Following this, leverage ratios began rising again, fluctuating between approximately 5.2 and 6.7 across 2022 to early 2025. Such variations may reflect strategic changes in capital structure or financing requirements over time.

Return on Equity (ROE)

The ROE showed significant volatility. It was positive at 16.04% initially before turning negative from March 2021 through December 2022, reaching a low around -18.56% in December 2022. From 2023 onwards, the ROE exhibited a strong recovery, rising sharply to over 35% by December 2023 and maintaining elevated levels near 33-36% through March 2025. This indicates improved profitability relative to shareholders' equity following a challenging period.

In summary, the data reveals an initial phase marked by profitability challenges and inefficient asset utilization, coupled with high financial leverage. This phase was followed by substantial gains in profitability and ROE starting in early 2023, despite some renewed fluctuations in asset turnover and financial leverage. The overall trend suggests resilience and recovery with improved financial health in recent periods.

The quarterly financial data reveals a dynamic performance trend over the observed periods, highlighting changes in profitability, efficiency, and leverage metrics.

Tax Burden

The tax burden ratio shows fluctuations with several missing values early in the series. From March 2023 onwards, the ratio predominantly remains below 1, starting at 0.32 and then rising near to 0.9 by March 2025. This indicates a consistent tax impact on earnings after the initial variability.

Interest Burden

The interest burden ratio exhibits considerable variability, missing data in early quarters and a notably negative value near -0.1 in late 2020, suggesting unusual interest expense or income recognition during that period. From early 2023 onward, the ratio stabilizes between 0.3 and 0.9, reflecting improved or normalized interest expense relative to operating profits.

EBIT Margin

The EBIT margin demonstrates significant volatility. It starts with positive values in early 2020, dips into negative territory in 2020 and much of 2021, indicating operating losses or weak profitability. A marked improvement begins in early 2022, with the margin increasing sharply to above 15% by mid-2023, and continuing upward to nearly 25% by early 2025, indicating a strong recovery and enhanced operating efficiency.

Asset Turnover

Asset turnover rises gradually from 0.29 in mid-2020 to a peak near 0.43 during 2023, suggesting improved efficiency in using assets to generate revenue. However, this is followed by a decline back to around 0.29 by the first quarter of 2025, indicating a recent reduction in operational efficiency or changes in asset base or sales volume.

Financial Leverage

The financial leverage ratio decreases sharply from above 7.6 in early 2020 to below 5.0 by late 2021, reflecting a reduction in reliance on debt or changes in equity base. After bottoming near 5.0, leverage increases gradually, ending near 6.4 by the beginning of 2025, indicating a moderate increase in debt or capital structure changes.

Return on Equity (ROE)

Return on equity exhibits pronounced volatility, with substantial negative returns throughout much of 2020 and 2021, reaching lows near -18%. This period aligns with low or negative EBIT margins, indicating poor overall profitability. Beginning in early 2022, ROE improves dramatically, turning positive and reaching above 30% through 2023 and early 2025. This trend points to a strong financial turnaround and value generation for shareholders in the later periods.

Overall, the data reflects a challenging operating environment through 2020 and 2021, characterized by losses, high leverage, and fluctuating burdens. From 2022 onwards, improvements in profitability (EBIT margin and ROE) and partial recovery in asset use efficiency are evident, although recent signals suggest some slight weakening in asset turnover and a moderate uptick in leverage. The tax and interest burdens stabilize in the latter periods, supporting the gaining profitability trajectory. These trends collectively indicate a phase of recovery followed by cautious moderation in operational metrics towards early 2025.

The analysis of the quarterly financial ratios for the company reveals notable fluctuations and distinct trends across the period under review.

Net Profit Margin

The net profit margin data begins from March 31, 2021, showing an initially positive value of 7.81%, which then declines and turns negative over the next three quarters, reaching a low of -9.17% in March 31, 2022. This period is characterized by consistent negative margins, evidencing operational challenges or increased costs impacting profitability. Starting from March 31, 2023, the net profit margin rebounds dramatically, achieving double-digit positive percentages (peaking at 15.08% by September 30, 2023). This positive trend continues with minor variation, reaching approximately 19.41% by March 31, 2025, indicating improved profitability and operational efficiency.

Asset Turnover

Asset turnover ratios are available starting September 30, 2020, initially around 0.29 and demonstrating a gradual upward trend through 2021 and 2022. The ratio peaks at 0.43 in December 31, 2023, reflecting enhanced efficiency in using assets to generate sales. However, from 2024 onwards, the asset turnover ratio shows a declining trend, falling back to approximately 0.29 by March 31, 2025. Such a decline may suggest either an accumulation of assets without proportional sales growth or reduced operational effectiveness in asset utilization towards the end of the period.

Return on Assets (ROA)

Return on assets exhibits substantial volatility in the earlier periods, beginning from a small positive value of 2.25% in March 31, 2021, then declining into negative territory for several quarters, with the lowest point near -3.28% around March 31, 2022. This corresponds with the negative net profit margin period, indicating overall weak asset profitability. From early 2023 onwards, ROA improves significantly, reaching peaks of around 6.45% by September 30, 2023, aligning with the recovery in net profit margin and reflecting better returns generated from asset investments. There is some fluctuation but it generally remains positive and above 2% through to the end of the timeline, indicating sustained improvements in asset efficiency and profitability.

Overall, the period shows a clear phase of financial stress and reduced profitability between mid-2021 and early 2023, followed by significant recovery and strengthening performance in profitability and asset returns through 2023 to early 2025. The declining asset turnover towards the latter part of the period warrants attention, as it may impact future efficiency and profitability if the trend continues.

The financial indicators demonstrate a period of volatility and subsequent recovery over the analyzed quarters. The tax burden ratio shows inconsistency, beginning with missing data, then a high ratio of 1.09, followed by fluctuating values, and settling into a range between 0.76 and 0.94 in the later quarters, indicating variability in tax expense relative to pre-tax profit.

The interest burden ratio also reflects instability in the earlier periods, including negative and missing values, before improving and stabilizing around 0.81 to 0.9 in recent quarters. This suggests an improvement in earnings before interest and taxes relative to earnings before taxes, indicating better control or reduction of interest expenses over time.

The EBIT margin experienced significant fluctuations across the periods. Initial quarters show relatively low or negative margins, reaching a trough around -6.94%. However, from early 2022 onwards, there is a marked improvement, with margins steadily rising, peaking at above 24% in the most recent quarter. This trend reveals a strong enhancement in operational profitability.

Asset turnover exhibits a moderate but steady upward trend from around 0.29 initially to a peak of approximately 0.43, followed by some variability and a decline back to 0.29 towards the end of the period. This indicates initial improvements in generating revenue from assets, with later periods showing some reduction in asset utilization efficiency.

Return on Assets (ROA) mirrors the pattern observed in EBIT margin and asset turnover, starting from slightly positive values, declining into negative territory during several quarters, and then recovering with positive growth from 2022 onward. The ROA peaks above 6% during the recent quarters, reflecting enhanced overall profitability relative to total assets.

Overall, the data indicates a challenging financial performance in the early quarters characterized by negative margins and returns, offset by improvements in profitability, tax management, and interest burden in the later periods, leading to a better utilization of assets and higher returns. The recent upward trends in EBIT margin and ROA suggest strengthening operational efficiency and financial health.

Tax Burden

Initial volatility with missing data and a high ratio of 1.09; later fluctuating between 0.76 and 0.94, indicating inconsistent tax effects on pre-tax earnings.

Interest Burden

Early negative and missing values followed by stabilization in the range of 0.81 to 0.9, reflecting improved management of interest expenses over time.

EBIT Margin

From negative margins reaching near -7% to strong positive margins exceeding 24%, indicating significant improvement in operational profitability.

Asset Turnover

Gradual increase from 0.29 to approximately 0.43 followed by a decline back to 0.29, showing initial gains in asset efficiency but later reversal.

Return on Assets (ROA)

Fluctuating from slightly positive values to negative periods and back to positive growth exceeding 6%, mirroring operational profitability trends and reflecting improved returns on total assets.

The financial ratios for the period under review reveal several noteworthy trends.

Tax Burden

The tax burden ratio exhibits fluctuations over the available periods, with an initial value above 1.00 at 1.09, indicating a tax expense greater than pre-tax earnings during that quarter. Subsequently, there is missing data for several periods. From March 2023 onwards, the ratio stabilizes below 1.00, generally ranging between 0.76 and 0.95. This suggests an improved tax efficiency or more consistent tax impact on earnings in the recent quarters.

Interest Burden

The interest burden ratio shows volatility in earlier periods, with a notably low (negative) value of -0.1 in December 2020, indicating unusual or negative earnings before interest and taxes relative to earnings before taxes in that quarter. The ratio improves strongly in subsequent periods, stabilizing in the range of approximately 0.80 to 0.90 from early 2023 through March 2025. This reflects a relatively stable interest expense impact on operating earnings, indicating more consistent operational profitability before interest costs.

EBIT Margin

The EBIT margin demonstrates a pattern of initial volatility and losses during 2020 and early 2021, with margins at times negative (e.g., -6.94% to -5.06%). However, starting from March 2022, there is a clear upward trend, with the margin turning positive and increasing steadily to reach a high of approximately 24.78% by March 2025. This strong upward trend signals significant improvements in operational efficiency and profitability at the EBIT level across the analyzed periods.

Net Profit Margin

Mirroring the EBIT margin, the net profit margin displays negative or low values throughout 2020 and early 2021, dipping as low as -9.17%. Beginning in March 2022, the margin recovers to a narrow positive value and then progresses upward markedly. By March 2025, the net profit margin attains 19.41%, indicating enhanced overall profitability after all expenses, interest, and taxes.

In summary, the data portray a company that experienced operational and financial challenges through 2020 and early 2021, with negative profitability margins and volatile interest and tax burdens. Since 2022, there is a clear recovery and strong upward trend in profitability ratios, with both EBIT and net profit margins reaching peak levels by March 2025. The tax and interest burden ratios have stabilized at levels consistent with improved earnings quality and financial stability.