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GE Aerospace (GE Aerospace) Owner Earnings per Share (TTM)

: 11.85 (As of Dec. 2023)
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In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

GE Aerospace's Owner Earnings per Share (TTM) ended in Dec. 2023 was $11.85. It's Price-to-Owner-Earnings ratio for today is 12.67.


The historical rank and industry rank for GE Aerospace's Owner Earnings per Share (TTM) or its related term are showing as below:

GE' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 6.74   Med: 19.61   Max: 220.43
Current: 12.67


During the past 13 years, the highest Price-to-Owner-Earnings ratio of GE Aerospace was 220.43. The lowest was 6.74. And the median was 19.61.


GE's Price-to-Owner-Earnings is ranked better than
69.53% of 128 companies
in the Aerospace & Defense industry
Industry Median: 22.115 vs GE: 12.67

GE Aerospace's Earnings per Share (Diluted) for the three months ended in Dec. 2023 was $1.45. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Dec. 2023 was $8.37. It's PE Ratio ratio for today is 17.94.

GE Aerospace's EPS without NRI for the three months ended in Dec. 2023 was $1.03. Its EPS without NRI for the trailing twelve months (TTM) ended in Dec. 2023 was $3.25. It's PE Ratio without NRI ratio for today is 46.23.


GE Aerospace Owner Earnings per Share (TTM) Historical Data

The historical data trend for GE Aerospace's Owner Earnings per Share (TTM) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

GE Aerospace Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Owner Earnings per Share (TTM)
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -5.50 4.34 -7.23 2.52 11.85

GE Aerospace Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Owner Earnings per Share (TTM) Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.52 10.65 11.63 12.56 11.85

Competitive Comparison

For the Aerospace & Defense subindustry, GE Aerospace's Price-to-Owner-Earnings, along with its competitors' market caps and Price-to-Owner-Earnings data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


GE Aerospace Price-to-Owner-Earnings Distribution

For the Aerospace & Defense industry and Industrials sector, GE Aerospace's Price-to-Owner-Earnings distribution charts can be found below:

* The bar in red indicates where GE Aerospace's Price-to-Owner-Earnings falls into.



GE Aerospace Owner Earnings per Share (TTM) Calculation

In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

To make it simple, then you will have:

Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)

GE Aerospace's Owner Earnings per Share (TTM) Calculation:

TTM / Last Quarter Average of Last 20 Quarters
Net Income 9,481
Depreciation, Depletion and Amortization 2,079
Change In Deferred Tax 1,162
5Y Average of Maintenance Capital Expenditure 1,298
Change In Working Capital 1,638
Shares Outstanding (Diluted Average) 1,102

1. Start with "Net Income" from income statement. GE Aerospace's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was $9,481 Mil.

2. "Depreciation, Depletion and Amortization" is from cashflow statement. GE Aerospace's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Dec. 2023 was $2,079 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.

3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income. GE Aerospace's Change In Deferred Tax for the trailing twelve months (TTM) ended in Dec. 2023 was $1,162 Mil.

4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $1,298 Mil

It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.

The following shows how to get maintenance capital expenditure.

First, calculate the revenue change regarding to the previous quarter. If the revenue decreased from the previous quarter, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous quarter, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.

GE Aerospace's 5-Year Average Maintenance Capital Expenditure = $1,298 Mil

5. "Change In Working Capital" is from cashflow statement. GE Aerospace's Change In Working Capital for the trailing twelve months (TTM) ended in Dec. 2023 was $1,638 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.

6. GE Aerospace's Shares Outstanding (Diluted Average) for the months ended in Dec. 2023 was 1102.000 Mil.

GE Aerospace's Onwer Earnings Per Share for Dec. 2023 is calculated as:

Owner Earnings per Share (TTM)
=( Net Income+Depreciation, Depletion and Amortization+Change In Deferred Tax
=( 9481 +2079+1162
-5Y Avg of Maintenance CAPEX+Change In Working Capital )/Shares Outstanding (Diluted Average)
-1298.1680091118+1638)/1102.000
=11.85

Price-to-Owner-Earnings=Current Price/Owner Earnings per Share (TTM)
=150.19/11.85
=12.67

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.

Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.


GE Aerospace Owner Earnings per Share (TTM) Related Terms

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GE Aerospace (GE Aerospace) Business Description

Industry
Address
5 Necco Street, Boston, MA, USA, 02210
GE was formed through the combination of two companies in 1892, including one with historical ties to American inventor Thomas Edison. Today, GE is a global leader in air travel and in the energy transition. The company is known for its differentiated technology and its massive industrial installed base of equipment sprawled throughout the world. That installed base most notably includes aerospace engines, gas and steam turbines, and onshore and offshore wind turbines. GE earns most of its profits on the service revenue of that equipment, which is generally higher-margin. The company is led by Danaher alumnus Larry Culp, who is leading a multiyear turnaround of the conglomerate based on lean principles.
Executives
Michael J Holston officer: Senior Vice President GENERAL ELECTRIC COMPANY, ONE FINANCIAL CENTER, SUITE 3700, BOSTON MA 02111
Rahul Ghai officer: Senior Vice President GENERAL ELECTRIC COMPANY, 5 NECCO STREET, BOSTON MA 02210
Scott Strazik officer: Senior Vice President ONE FINANCIAL CENTER, SUITE 3700, BOSTON MA 02111
Jessica R. Uhl director 200 WEST STREET, NEW YORK NY 10282
Thomas S Timko officer: Vice President 300 RENAISSANCE CENTER, M/C: 482-C25-A36, DETROIT MI 48265-3000
Darren W Mcdew director 100 ABBOTT PARK ROAD, ABBOTT PARK IL 60064
L Kevin Cox officer: Senior Vice President THE PEPSI BOTTLING GROUP, INC., ONE PEPSI WAY, SOMERS NY 10589
Russell Stokes officer: Senior Vice President ONE FINANCIAL CENTER, SUITE 3700, BOSTON MA 02111
Happe Carolina Dybeck officer: Senior Vice President 5 NECCO STREET, BOSTON MA 02210
John S. Slattery officer: Executive Vice President 5 NECCO STREET, BOSTON MA 02210
Thomas W Horton director 4333 AMON CARTER BLVD., FORTH WORTH TX 76155
Isabella D Goren director C/O LYONDELLBASELL INDUSTRIES N V, DELFTSEPLEIN 27E, ROTTERDAM P7 3013AA
Francisco Dsouza director 500 GLENPOINTE CENTRE W, TEANECK NJ 07666
Risa J Lavizzo-mourey director GE HEALTHCARE TECHNOLOGIES INC., 500 W. MONROE ST., CHICAGO IL 60661
Paula Rosput Reynolds director 605 HILLSIDE DRIVE EAST, SEATTLE WA 98112

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