GE Aerospace is set to announce its earnings on Tuesday, April 22, 2025. With a market cap of $194 billion, GE has shown strong profitability, recording $39 billion in revenue, $6.8 billion in operating income, and $6.6 billion in net earnings over the past twelve months. For the upcoming release, analysts expect earnings of $1.26 per share on revenue of $9.04 billion. GE’s aftermarket business is likely to contribute positively to sales. However, a potential challenge comes from reports that China has instructed its airlines to stop accepting Boeing deliveries due to the ongoing tariff trade tensions, which could affect GE, given that it supplies engines for Boeing aircraft.
For event-driven traders, understanding historical stock behavior around earnings can be valuable. Over the last five years, GE stock delivered positive returns one day after earnings in 58% of the cases, with a median gain of 4.6% and a maximum one-day gain of 8.3%. It’s worth noting that this data reflects a time when GE’s business included Aerospace, Healthcare, and Vernova segments.
There are two common strategies for earnings-related trades: first, using historical odds to take positions before the announcement; second, evaluating short- and medium-term return correlations after the event to guide follow-up trades. While the stock’s actual movement will hinge on whether GE meets or exceeds expectations, understanding these trends can aid trading decisions. For those seeking lower volatility than individual stocks, the Trefis High-Quality portfoliooffers an alternative, having outperformed the S&P 500 with gains of over 91% since inception. Also see – Will ISRG Stock Get A Boost From Its Q1 2025 Earnings?
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GE Aerospace’s Historical Odds Of Positive Post-Earnings Return
Key insights on one-day (1D) post-earnings returns:
- Across 19 data points in the past five years, 11 were positive and 8 were negative. Thus, the positive 1D return rate is about 58%.
- This 58% figure remains unchanged even when examining the past three years.
- The median return among the 11 positives is 4.6%, while for the 8 negatives it’s -3.0%.
Further data for 5-Day (5D) and 21-Day (21D) post-earnings returns is summarized in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively lower-risk approach—assuming high correlation—is to analyze the relationship between short-term and medium-term returns. Traders can then align their strategies based on which pairs show the highest correlation. For instance, if 1D and 5D have the strongest link, a trader may go “long” for 5 days following a positive 1D return. Below is some correlation data based on five-year and more recent three-year trends. Note: 1D_5D denotes correlation between 1-day and 5-day post-earnings returns.
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