1Q25 Adjusted Revenue: $9.0B, +11% YoY, miss estimates by $50M
1Q25 Non-GAAP EPS: $1.49, beat estimates by $0.22
FY25 Guidance: Maintains guidance of revenue expected in LDD vs growth of 12.30% consensus. Adj EPS of $5.10-$5.45 vs $5.42 consensus. Operating profit of $7.8-$8.2B. Revenue of commercial engines and services growth in the mid-teens, defense and propulsion technologies in the mid- to high-single digit range and corporate costs to remain less than $1B.
Comment: GE Aerospace delivered a strong Q1, reporting adjusted earnings per share of US$1.49, beating estimates of US$1.27, and 11% revenue growth to US$9bn. The company reaffirmed its full-year earnings forecast of US$5.10 to US$5.45 per share, despite potentially facing over US$500mn in tariff-related costs due to President Trump’s trade policies. Its CEO highlighted efforts to manage tariff pressure through price increases, cost controls, tariff surcharges, and leveraging foreign trade zones and duty drawback programs. However, he acknowledged potential risks including slower flight departures in North America and reduced spare parts shipments to China. GE Aerospace continues to benefit from its dominant position in the commercial engine market, with more than 70% of revenue coming from high-margin parts and services, and a backlog of US$170bn supporting long-term stability. We anticipate GE Aerospace to continue to face near-term macro and trade headwinds due to persistent tariffs and softer demand from China may challenge parts delivery. However, its resilient aftermarket business, strategic cost controls, and diversified customer base alongside its order backlog, position it well for continued growth in 2025. 2Q25recommended trading range: $180 to $200. Positive Outlook.
1Q25 Revenue: $17.96B, +4.4% YoY, beat estimates by $160M
1Q25 GAAP EPS: $7.28, beat estimates by $0.93
FY25 Guidance: Maintain sales outlook to be between $73.75-$74.75B, diluted EPS of $27.0-$27.3 and operating profit of $8.1-$8.2B.
Comment: Lockheed Martin reported strong first quarter results, with earnings per share of US$7.28, beating analysts’ estimates of US$6.34. Total revenue rose 4.4% YoY to US$17.96bn, beat estimates by US$160mn, driven by broad-based growth across most segments, especially in aerospace, where F-35 fighter jet sales increased 3.1%. Net income climbed to US$1.71bn, up from US$1.55bn a year ago. The company reaffirmed its full-year guidance of sales between US$73.75bn to US$74.75bn and diluted EPS of US$27-US$27.3, buoyed by sustained demand for missile systems and aircraft, amid heightened geopolitical tensions in Ukraine and the Middle East. While the F-35 program faces delays in technology upgrades, demand remains strong. However, trade tensions could pose risks, with Canada reviewing a C$19 billion F-35 deal due to U.S. tariffs, highlighting the potential diplomatic fallout from trade policy under President Trump. Lockheed Martin will continue to face near-term headwinds from trade-related uncertainties, however, strong global demand for advanced defense systems, particularly as conflicts persist and allied defense budgets expand, could further boost its international sales and expand its growing backlog. 2Q25recommended trading range: $440 to $480. Neutral Outlook.
1Q25 Revenue: $20.3B, +5.2% YoY, beat estimates by $500M
1Q25 Non-GAAP EPS: $1.47, beat estimates by $0.10
FY25 Guidance: Reaffirms full-year outlook Adjusted sales of $83.0-$84.0B, including 4% to 6% organic growth, adjusted EPS of $6.00 – $6.15 and free cash flow of $7.0-$7.5B. (Outlook does not incorporate the impact of the recently enacted incremental U.S. and non-U.S. tariffs)
Comment: RTX Corporation delivered better-than-expected Q1 results, posting adjusted EPS of US$1.47 and revenue of US$20.31bn. Growth was driven by its commercial aerospace units, Collins Aerospace revenue rose 8%, and Pratt & Whitney posted a 14% increase amid sustained demand for aircraft maintenance and parts. However, its Raytheon defense segment saw a 5% YoY decline, due largely to a divestiture of its cybersecurity and services business. Despite strong operational performance, RTX warned of a potential US$850mn hit to 2025 profits from escalating tariffs under Trump’s proposed trade policies. These estimates assume no changes in customer behaviour and continued high tariffs on imports from China, Canada, Mexico, and others. Pratt & Whitney continues to face pressure due to ongoing inspections and groundings linked to flaws in its Geared Turbofan engines. Looking ahead, potential regulatory shifts, especially on military export policies and trade tariffs, could significantly influence margins and international competitiveness of RTX. Furthermore, supply chain issues and engine inspection challenges may continue to weigh on its aerospace divisions profitability. 2Q25recommended trading range: $110 to $130. Negative Outlook.
1Q25 Revenue: $19.34B, -9.2% YoY, miss estimates by $2.07B
1Q25 Non-GAAP EPS: $0.27, miss estimates by $0.15
FY25 Guidance: No guidance provided. Plan to revisit FY25 guidance in its Q2 update.
Comment: Tesla’s Q1 earnings showed continued pressure on its core business, with auto revenue down 20%, net profit plunging 71%, and 13% fewer deliveries YoY. Revenue was US$19.34bn , well below analyst expectations of US$21.11bn. Automotive gross margin dropped to 12.5%, excluding regulatory credits. Its CEO Elon Musk said he will scale back involvement in federal government work (DOGE) to focus more on Tesla and other ventures, lifting investor sentiment. Musk’s reduced time spent on external political efforts has been seen as a net positive after concerns over neglecting Tesla operations. Tesla reaffirmed its affordable EV launch for H1 2025, likely a pared-down Model Y, and confirmed its robotaxi launch in Austin remains on track for June. However, the company flagged ongoing risks from tariffs, political instability, and supply chain disruptions, particularly between the U.S. and China, which have already led to suspended orders for the Model S and X in China. Despite macroeconomic and geopolitical headwinds, Musk insists underlying consumer demand remains intact, but growth projections will be reassessed in the second quarter amid policy uncertainties. Looking ahead, we anticipate Tesla to face margin pressures, sluggish deliveries, and tariff-related setbacks, especially in China. Near-term performance will continue to be impacted by global trade volatility and slowing EV demand, but successful execution of new lower-cost vehicle rollouts and advancements in autonomous driving could benefit Tesla in the second half. 2Q25recommended trading range: $220 to $260. Negative Outlook.
1Q25 Revenue: $2.25B, +19.0% YoY, beat estimates by $60M
1Q25 Non-GAAP EPS: $1.81, beat estimates by $0.08
FY25 Guidance: Expect worldwide da Vinci procedure growth of approximately 15% to 17% in 2025, compared to 17% in 2024. Non-GAAP gross profit margin to be within a range of 65% and 66.5% of revenue in 2025, compared to 69.1% in 2024. This range includes an estimated impact from tariffs of 1.7% of revenue, plus or minus 30 basis points. Non-GAAP operating expense growth of 10% to 14% in 2025, compared to 10% in 2024.
Comment: Intuitive Surgical reported strong Q1 results, beating analyst expectations with adjusted earnings of US$1.81 per share and revenue of US$2.25bn. However, the company warned that escalating U.S. tariffs, particularly those affecting its operations in China and Mexico, will increasingly pressure its margins and competitiveness throughout the rest of 2025 and into 2026. The company lowered its projected 2025 adjusted gross profit margin to 65%-66.5%, down from 69.1% last year, citing a 1.7% revenue impact from tariffs. Intuitive is considering operational adjustments but does not expect meaningful benefits in the near term. It anticipates worldwide da Vinci procedure growth of approximately 15% to 17% in 2025, compared to 17% in 2024. Looking ahead, external cost pressures may continue to weigh on margins and competitive positioning, however, strategic adjustments to its supply chain and operational footprint could help mitigate tariff impacts and preserve Intuitive Surgical’s profitability in 2025. 2Q25recommended trading range: $450 to $490. Neutral Outlook.
FY25 Guidance: Expect €21.6-21.9B cloud revenue at constant currencies, €33.1-33.6B cloud and software revenue at constant currencies, €10.3-10.6B non-IFRS operating profit at constant currencies and approximately €8.0B free cash flow at actual currencies with an effective tax rate (non-IFRS) of approximately 32%.
Comment: SAP reported strong Q1 results, with adjusted operating profit rising to €2.5bn, above analysts’ expectations of €2.22bn and significantly higher than the €1.53bn posted a year earlier. The performance was driven by continued growth in its cloud business, supported by increased demand for AI-powered solutions. The company reaffirmed its full-year cloud revenue guidance of €21.6bn to €21.9bn and is targeting 2025 operating profit between €10.3bn and €10.6bn on a constant currency basis. Despite broader economic weakness in Germany, SAP remains resilient, supported by its global footprint and cloud transition strategy. Amid macroeconomic uncertainty, SAP is well-positioned to sustain growth through 2025, as it accelerates AI integration across its cloud portfolio and advances restructuring efforts to enhance operational efficiency and long-term scalability. 2Q25recommended trading range: $250 to $280. Positive Outlook.
