GE Aerospace
GE · NYSE
Next quarter
Reports Oct 20, 2026.
Consensus is $2.01 EPS for Sep 2026 across 7 estimates, ranging $1.90 to $2.08.
GE Jun 2026
- 8.60%
- +0.90%
- $1.86
- $2.02
- —
- $13.35B
Reported results
- $13.35B
- $2.37B
- $2.26
Highlights
- Earnings beat: Adjusted EPS was $2.02, up 22% year over year and 8.6% above the $1.86 consensus; GAAP continuing EPS was $2.30 versus $1.87 a year ago.
- Services-led growth: GAAP revenue rose 21% to $13.35 billion, up from $12.39 billion in Q1 and $11.02 billion in Q2 2025; adjusted revenue increased 24% to $12.63 billion.
- Commercial acceleration: Commercial Engines & Services revenue increased 27% to $9.73 billion and operating profit rose 20% to $2.66 billion, led by 26% services growth and 30% equipment growth.
- Cash generation: Operating cash flow increased 39% to $3.26 billion and free cash flow rose 43% to $3.03 billion; first-half FCF was $4.69 billion, up 31%.
- Guidance raised: Full-year adjusted EPS guidance increased to $7.65-$7.85 from $7.10-$7.40, operating profit to $10.55-$10.75 billion from $9.85-$10.25 billion, and FCF to $8.9-$9.2 billion from $8.0-$8.4 billion.
- Backlog visibility: Remaining performance obligations reached $210.8 billion at June 30, up 11% from year-end, including $178.7 billion of services obligations.
- Production improving: First-half total engine deliveries rose 37% and LEAP deliveries increased 41%; Q2 commercial engine deliveries were 659, including 510 LEAP engines.
- Margin trade-off: Adjusted operating margin declined 130 basis points to 21.7%, as higher install-engine deliveries, growth investment and inflation offset volume and pricing benefits.
- Capital return: GE Aerospace repurchased 6.9 million shares for $2.0 billion in Q2 and paid a $0.47 quarterly dividend, up from $0.36 a year earlier.
Analysis
GE Aerospace's second quarter was a services-driven beat with stronger cash conversion and a broad guidance increase. Adjusted EPS of $2.02 exceeded the $1.86 consensus by 8.6%, rose 22% from $1.66 a year ago and increased from $1.81 in Q1. GAAP revenue reached $13.35 billion, up 21% year over year and 8% sequentially, while GAAP profit rose 17% to $2.80 billion from $2.39 billion a year ago. Adjusted operating profit increased 18% to $2.75 billion, although margin fell to 21.7% from 23.0%.
The defining feature was Commercial Engines & Services, where revenue rose 27% to $9.73 billion and profit increased 20% to $2.66 billion on shop visits, spare parts, pricing and higher engine deliveries. Defense & Propulsion Technologies added steadier growth, with revenue up 16% to $3.44 billion and profit up 18% to $475 million. Strong execution and improved material availability supported a 43% increase in quarterly FCF to $3.03 billion, while the $210.8 billion RPO balance provided visibility. Management raised every major 2026 target, including adjusted EPS to $7.65-$7.85 and FCF to $8.9-$9.2 billion, despite ongoing supply-chain, inflation and investment pressure on margins.
Commercial services growth
Commercial Engines & Services drove the quarter and remains the main source of incremental earnings. Revenue increased 27% to $9.73 billion, with services up 26% to $7.43 billion and equipment up 30% to $2.30 billion. Internal shop visit revenue rose 25% in Q2 and 30% in the first half, while spare-parts revenue increased more than 25%. Profit grew 20% to $2.66 billion, but the segment margin declined 160 basis points to 27.3%.
- Volume and pricing: Profit benefited from higher shop-visit and spare-parts volume, pricing and improved material availability, partly offset by install-engine growth, inflation and higher growth investment.
- Delivery ramp: Q2 commercial engine deliveries rose to 659 from 525 a year earlier, including 510 LEAP engines versus 410; first-half total deliveries increased 37% and LEAP deliveries 41%.
- Segment outlook: CES now expects approximately 20% revenue growth in 2026, including low-20s services growth, and operating profit of $10.25-$10.35 billion, up from the prior $9.6-$9.9 billion range.
Raised 2026 outlook
GE Aerospace raised its full-year targets across revenue, profit, EPS and cash flow after a strong first half. The increase reflects better services demand, improving shop output and engine delivery visibility, with the company citing more than $210 billion of backlog to support the remainder of the year.
- Revenue: Adjusted revenue growth is now expected in the high teens, versus the prior low-double-digit outlook; 2025 adjusted revenue was $42.3 billion.
- Operating profit: Guidance increased to $10.55-$10.75 billion from $9.85-$10.25 billion, compared with $9.1 billion in 2025.
- Adjusted EPS: The new range is $7.65-$7.85, up from $7.10-$7.40 and versus $6.37 in 2025.
- Free cash flow: Guidance rose to $8.9-$9.2 billion from $8.0-$8.4 billion, with conversion still expected to exceed 100%.
Defense propulsion execution
Defense & Propulsion Technologies provided a second, smaller growth engine. Revenue rose 16% to $3.44 billion, while operating profit increased 18% to $475 million and margin expanded 30 basis points to 13.8%. Defense & Systems revenue grew 12%, including a 7% increase in deliveries, while Propulsion & Additive Technologies revenue increased 23%, helped by Avio Aero.
- Orders and backlog: Q2 orders increased 12% to $4.14 billion, and segment RPO reached $30.7 billion, up 19% from December 2025 as equipment orders outpaced recognized revenue.
- Updated outlook: DPT now expects low-double-digit 2026 revenue growth, versus the prior mid- to high-single-digit view, and operating profit of $1.6-$1.7 billion versus $1.55-$1.65 billion previously.
- Program progress: GE completed the XA102 assembly readiness review, secured a U.S. Air Force contract to mature the GE426 engine and announced additional F404, CT7 and LEAP program wins.
Cash flow and capital return
Cash generation was notably stronger than earnings growth. Q2 operating cash flow rose 39% to $3.26 billion and FCF increased 43% to $3.03 billion. First-half operating cash flow was $5.13 billion, up 32%, while first-half FCF reached $4.69 billion, up 31%. The improvement reflected higher earnings, stronger collections and lower working-capital usage, although inventories increased to $12.44 billion from $11.87 billion at year-end as output ramped.
- Share repurchases: The company bought back 6.9 million shares for $2.01 billion in Q2, including $1.03 billion through accelerated share repurchases; $17.99 billion remained under the $20 billion authorization.
- Balance sheet: Total borrowings declined to $19.16 billion from $20.49 billion at December 31, while cash, cash equivalents and restricted cash were $9.35 billion.
- Dividend: The quarterly dividend increased to $0.47 per share from $0.36 a year earlier.
Technology and supply chain
Operational improvement remains central to GE Aerospace's ability to convert demand into deliveries and aftermarket revenue. Management said priority-supplier material input increased by double digits sequentially and year over year, while FLIGHT DECK helped produce record internal shop-visit output. The company is also investing in durability, capacity and next-generation propulsion.
- LEAP durability: GE completed certification of the LEAP-1B durability kit, including an upgraded high-pressure-turbine blade, expected to deliver approximately twice the time-on-wing; full cutover is expected from early 2027.
- Future propulsion: The company completed initial ground tests of a megawatt-class hybrid-electric engine system under NASA's EPFD program, clearing a path toward flight testing.
- Investment load: GE plans to invest $1 billion in U.S. manufacturing and hire 5,000 U.S. employees in 2026, while R&D expense increased to $460 million in Q2 from $359 million a year earlier.
