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GE · Forward model · Eliminations & Other · Bear case

What has to happen in Eliminations & Other

Model as of

This page changes Eliminations & Other inside the complete GE model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

GE forward model
Horizon
Consolidated fair value $157.93 all other verticals held in this portfolio case
Final-quarter revenue −$591M -4% of company revenue
Explicit segment contribution −$2.87B EBITDA less segment capex, before corporate items

The supply chain relapses or air traffic turns, and the mix problem the basis quarter already showed gets worse. Growth is being bought with dilutive install engines including GE9X: CES operating margin fell 160 basis points year on year even in a 27% growth quarter. Take a point a quarter off growth, two points off margin, and let a cyclical franchise held at 29x EBITDA normalise to 16x, and fair value is $157.93 - 53.0% below the traded price. This is not a demand collapse; it is the aftermarket ramp arriving slower and at lower margin than the guided year implies.

Eliminations & Other

Basis quarter−$540M
Final quarter−$591M
Final revenue mix-4%

The negative reconciling line between segment revenue and consolidated revenue: intersegment sales, principally engines and parts moving between CES and DPT, plus items GE does not attribute to a segment. It exists so the four verticals sum exactly to GAAP total revenue, and it scales with intersegment volume, so it deepens as the segments grow.

Last four quarters
2026 Q1 −$520M Estimated
2026 Q2 −$540M Reported
Intersegment revenue eliminationsOther non-segment items
Sequential growth +1.8%/qtr decaying toward +1.2% Tracks segment volume; eliminations deepened 14% year on year in the basis quarter.
Eliminations & Other

Latest: −$591M (2031Q2E)

Period Value
2026Q1 −$520M
2026Q2 −$540M
2026Q3E −$544M
2026Q4E −$548M
2027Q1E −$552M
2027Q2E −$555M
2027Q3E −$558M
2027Q4E −$561M
2028Q1E −$564M
2028Q2E −$567M
2028Q3E −$569M
2028Q4E −$572M
2029Q1E −$574M
2029Q2E −$576M
2029Q3E −$578M
2029Q4E −$580M
2030Q1E −$582M
2030Q2E −$584M
2030Q3E −$586M
2030Q4E −$587M
2031Q1E −$589M
2031Q2E −$591M

Assumptions & reasoning

  • The 33.0% EBITDA margin is the disclosed ratio of eliminations profit to eliminations revenue: $(178)m over $(540)m in the basis quarter. Both are negative, so the product is a negative EBITDA of $(178)m - exactly the eliminations cost GE reports. It is not an operating margin and should not be read as one.
  • 2026 Q1 is the only estimated point in this model. GE prints Eliminations & Other of $(519)m for that quarter, which makes its own segment subtotal foot to $11,615m against the $11,614m adjusted revenue it prints one page later. The model uses $(520)m, the residual of the disclosed $12,392m GAAP total less CES $8,920m, DPT $3,214m and Insurance $778m, so the four lines reconcile exactly. The $1m difference is rounding in GE's table.
  • Capex is exactly zero, because a reconciliation buys nothing. Everything the company spends sits in the CES and DPT capex intensities.
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