There are plenty of metrics that GE Aerospace (GE 1.53%) investors should keep an eye on in 2025, but the key one is the operating margin for its commercial engines and services (CES) segment.

Based on 2024 numbers, the CES segment produces 6.6 times the profit of the company's other segment, defense & propulsion technologies (DPT), and its operating profit margin guides the company's bottom line. Here's what to look out for.

GE Aerospace margin

It's essential to understand the dynamics of the CES margin. The business model in the model commercial airplane engine market typically involves selling engines at a loss (the so-called "negative engine margin"), then making money over decades of providing aftermarket parts and services for those engines.

As such, when the number of engines CES produced dropped by 7.9% in 2024 (including a 10.4% decline in LEAP engines), its profit margin rose compared to 2023.

Commercial Engines & Services Segment

Q4 2023

Q1 2024

Q2 2024

Q3 2024

Q4 2024

Revenue

$6.43 bn

$6.07 bn

$6.13 bn

$7.0 bn

$7.65 bn

Operating profit margin

23.3%

23.3%

27.4%

25.7%

28.2%

Operating profit

$1.5 bn

$1.4 bn

$1.7 bn

$1.8 bn

$2.2 bn

Data source: GE Aerospace. "bn" stands for billion.

However, management expects a 15% to 20% growth in LEAP deliveries in 2025, which will negatively impact the CES segment's margins. Still, GE Aerospace's services margin outperformed expectations last year. Suppose it can continue to do so in 2025. In that case, GE Aerospace hopes to achieve an operating profit figure at the higher end of its guidance range of $7.6 billion to $7.9 billion for CES.

GE Aerospace in 2025

Investors need to monitor the interplay between LEAP deliveries (more is good for the company's long-term prospects, but cuts into its near-term margins) and its reported profit margins. Merely maintaining 2024's quarterly margins would be an excellent result for GE Aerospace, not least as management expects CES revenues to grow at a mid-teens percentage rate this year.