GE Aerospace
GE · NYSE
Next quarter
Expected to report Jan 21, 2027 — estimated from last year’s reporting date.
Consensus is $2.03 EPS for Dec 2026 across 6 estimates, ranging $1.95 to $2.16.
GE Sep 2026
- 11.39%
- $2.02
- $2.25
- —
- $14.12B
Reported results
- $14.12B
- $2.29B
- $2.20
Highlights
- EPS beat: Adjusted EPS was $2.25, up 36% year over year and 11.4% above the $2.02 consensus; GAAP continuing EPS was $2.32, while diluted EPS including discontinued operations was $2.20.
- Commercial demand: Orders rose 49% to $19.0 billion, led by CES orders up 58% to $15.3 billion; total revenue reached $14.1 billion, up 16% GAAP and 18% on an adjusted basis.
- Margin expansion: Operating profit increased 30% to $3.0 billion and operating margin expanded 220 basis points to 22.5%; GAAP profit margin fell 80 basis points to 19.9%, reflecting the volatile insurance business.
- Raised outlook: GE lifted 2026 adjusted EPS guidance to $8.00–$8.10 from $7.65–$7.85, operating profit to $10.9–$11.0 billion from $10.55–$10.75 billion, and free cash flow to $9.1–$9.4 billion from $8.9–$9.2 billion.
- CES growth: Segment revenue rose 21% to $10.3 billion, with services up 17% and equipment up 38%; quarterly internal shop-visit revenue increased 12%, including LEAP growth above 40%.
- Cash conversion: Quarterly operating cash flow and free cash flow each declined 14% year over year, to $2.2 billion and $2.0 billion, respectively, despite stronger operating profit.
- Insurance volatility: Run-off insurance generated a $210 million loss versus $361 million of profit a year earlier; the 2026 reserve assumption review added a $328 million pretax charge.
- Capacity investment: GE signed an agreement to acquire CPP for $11.75 billion, expected to close in the second half of 2027; the company plans to fund about $7 billion in cash and the remainder with new debt.
Analysis
GE Aerospace’s third quarter combined a strong operating result with uneven GAAP and cash comparisons. Adjusted EPS of $2.25 beat the $2.02 consensus by 11.4% and rose 36% from $1.66 a year ago. Revenue was $14.1 billion, up 16% GAAP and 18% excluding insurance, while operating profit grew 30% to $3.0 billion and operating margin expanded 220 basis points to 22.5%. GAAP continuing EPS was $2.32, up 14%; diluted EPS including discontinued operations was $2.20, versus $2.02 a year ago. Sequentially, revenue advanced from $13.35 billion in Q2, while net income eased to $2.29 billion from $2.37 billion and diluted EPS declined to $2.20 from $2.26.
The defining driver was commercial aerospace demand, particularly CES services and equipment: CES revenue rose 21%, orders surged 58%, and the company cited higher shop-visit volume, heavier workscopes, spare parts and pricing. That operating improvement was partly obscured in GAAP results by a $210 million run-off insurance loss, compared with $361 million of insurance profit a year earlier. Cash also lagged earnings, with quarterly free cash flow down 14% year over year. On stronger year-to-date performance and its Q4 outlook, GE raised all key 2026 adjusted guidance ranges, including EPS to $8.00–$8.10 and free cash flow to $9.1–$9.4 billion.
Commercial engines and services
CES remained the main growth engine. Orders rose 58% to $15.3 billion, including services growth of 23% and equipment orders more than tripling. Revenue increased 21% to $10.3 billion and segment profit rose 21% to $2.9 billion. Higher service volume, heavier workscopes, spare parts and pricing supported earnings; mix and inflation held the margin at 27.9%, down 10 basis points.
- Aftermarket activity: Services revenue grew 17%; internal shop-visit revenue rose 12% in the quarter, including LEAP shop-visit growth above 40%, and spare-parts revenue increased more than 20%.
- Deliveries: Equipment revenue increased 38%, with engine deliveries up 8% and LEAP deliveries up 5%. GE9X shipments were made, but their financial impact awaits midseal certification.
- Backlog and capacity: GE cited a commercial services backlog above $170 billion. Year to date, internal shop-visit revenue grew 23%, total engine deliveries increased 25%, and LEAP deliveries rose 26%.
Guidance and execution
GE raised full-year 2026 guidance across the board, citing year-to-date performance and its Q4 outlook. The upgrade reflects continued demand and execution progress, though supply constraints and inflation remain risks the company says it is working to mitigate.
- Revenue: Adjusted revenue growth is now expected at approximately 19–20%, versus the prior high-teens outlook.
- Operating profit: The range increased to $10.9–$11.0 billion from $10.55–$10.75 billion.
- Adjusted EPS: The range increased to $8.00–$8.10 from $7.65–$7.85.
- Free cash flow: The range increased to $9.1–$9.4 billion from $8.9–$9.2 billion, with conversion expected above 100%.
- CES outlook: Segment revenue growth is expected in the low 20s and operating profit of $10.5–$10.6 billion, with higher services growth and a reduced GE9X impact supporting the increase.
Margins and insurance
The gap between operating and GAAP margin performance is important to the print. Operating profit rose 30% to $2.99 billion, lifting margin to 22.5% from 20.3%. GAAP profit increased 12% to $2.81 billion, but GAAP margin contracted 80 basis points to 19.9%. The run-off insurance operation swung from profit to loss, substantially weighing on the year-over-year GAAP comparison; its results are excluded from adjusted revenue and operating profit measures.
- Insurance swing: The business recorded a $210 million quarterly loss versus $361 million of profit in Q3 2025. The 2026 annual reserve assumption review resulted in a $328 million pretax charge, primarily tied to claims experience and long-term care cost inflation, partly offset by premium rate increases.
- Underlying profit drivers: Segment profit increased about $0.5 billion year over year, while adjusted Corporate & Other costs fell by about $0.2 billion, supporting adjusted earnings growth.
Cash flow and capital
Cash generation did not match the step-up in operating profit this quarter: operating cash flow and free cash flow were both down 14% year over year. The nine-month picture was stronger, with free cash flow up 13%, but working-capital growth used more cash than in the prior-year period. GE also continued shareholder returns while preparing to fund a sizeable capacity acquisition.
- Quarterly cash: Operating cash flow was $2.20 billion and free cash flow was $2.04 billion, compared with $2.56 billion and $2.36 billion, respectively, a year earlier.
- Year-to-date cash: Nine-month operating cash flow increased 14% to $7.33 billion and free cash flow rose 13% to $6.73 billion. Working-capital changes used $1.8 billion, $0.9 billion more cash than in the first nine months of 2025.
- CPP transaction: The proposed $11.75 billion acquisition of Consolidated Precision Products is intended to expand mission-critical castings capacity. GE expects to fund about $7 billion with cash and the balance with new debt; closing is expected in the second half of 2027, subject to approvals.
- Shareholder returns: GE repurchased $4.0 billion of shares during the first nine months of 2026 and paid $1.36 billion in dividends.
Defense and propulsion
DPT delivered steadier, slower growth than CES. Revenue rose 7% to $3.47 billion and segment profit increased 8% to $475 million, with margin up 20 basis points to 13.7%. Higher volume and pricing supported results, partly offset by mix and inflation. The company maintained its 2026 outlook for low-double-digit revenue growth and $1.6–$1.7 billion of operating profit.
- Orders and backlog: Quarterly orders increased 18% to $4.27 billion. DPT remaining performance obligations were $31.4 billion at quarter end, up 22% from December 2025, as equipment orders outpaced recognized revenue.
- Programs: GE reported a contract worth up to $2.9 billion for ongoing F414 engine support for U.S. Navy aircraft, and advanced the XA102 adaptive-cycle engine as the U.S. Air Force’s NGAP program moved into hardware procurement and subcomponent testing.
