GE Aerospace Raises 2026 Outlook as Q3 Orders Jump 49%

GE Aerospace (GE) raised its full-year 2026 guidance across its key financial measures after third-quarter orders increased 49% and strength in commercial services helped lift adjusted revenue and earnings. The company now expects adjusted revenue growth of about 19% to 20%, adjusted operating profit of $10.9 billion to $11.0 billion and adjusted earnings per share of $8.00 to $8.10.

Third-quarter adjusted revenue rose 18% year over year to $13.29 billion, while adjusted operating profit increased 30% to $2.99 billion, producing a 22.5% operating margin. Adjusted EPS climbed 36% to $2.25, supported by operating profit growth and a lower diluted share count. Total orders reached $18.99 billion.

On a GAAP basis, revenue was $14.12 billion, net income attributable to common shareholders was $2.41 billion and diluted EPS was $2.32.

Free cash flow declined 14% to $2.04 billion in the quarter, with conversion of 87%, compared with 134% a year earlier. The cash-flow reconciliation showed a $1.54 billion use of cash from operating working capital, including a $1.66 billion outflow from current receivables. For the first nine months of 2026, however, free cash flow increased 13% to $6.73 billion, while adjusted revenue rose 23% to $37.53 billion and adjusted EPS advanced 28% to $6.13.

Commercial services and equipment drive growth

Commercial Engines & Services, GE Aerospace’s largest segment, generated third-quarter revenue of $10.34 billion, up 21%, and operating profit of $2.89 billion, also up 21%. Its operating margin edged down 10 basis points to 27.9% as higher services volume and pricing were partly offset by business mix and inflation.

Services revenue grew 17%. Revenue from internal shop visits increased 12% on higher volume and work scope, including growth of more than 40% for LEAP, while spare-parts revenue rose more than 20%. Equipment revenue climbed 38% as engine deliveries increased 8%, including 5% growth in LEAP deliveries and higher GEnx volumes. GE Aerospace said there was no third-quarter impact from GE9X deliveries.

Commercial Engines & Services orders surged 58% to $15.27 billion, including a 235% increase in equipment orders. For the year to date, segment revenue rose 27% to $28.99 billion, while operating profit increased 22% to $7.90 billion. The year-to-date margin declined 130 basis points to 27.2%.

GE Aerospace said its operating initiatives continued to support output. Year-to-date commercial services revenue increased 26%, and total engine deliveries rose 21%. LEAP turnaround time declined by about two weeks, which, together with other measures, reduced aircraft grounded because of engines to nearly zero. The company also reported more than doubling LEAP fan assembly output and said material input from priority suppliers grew by double digits in the third quarter.

Defense business posts higher revenue and profit

Defense & Propulsion Technologies reported revenue of $3.47 billion, up 7%, and operating profit of $475 million, up 8%. Its operating margin increased 20 basis points to 13.7%.

Defense & Systems revenue rose 5%, with growth in both services and equipment and a 4% increase in engine deliveries. The defense book-to-bill ratio was 1.0 times for the quarter and 1.5 times for the first nine months. Propulsion & Additive Technologies revenue increased 10%, driven by Avio Aero and Unison.

Year-to-date segment revenue grew 13% to $10.13 billion, while operating profit increased 14% to $1.33 billion. The operating margin was unchanged at 13.1%.

2026 outlook moves higher

GE Aerospace’s current forecast for adjusted revenue growth of approximately 19% to 20% compares with its prior high-teens outlook. The adjusted operating-profit forecast rose from $10.55 billion-$10.75 billion, while the adjusted EPS range increased from $7.65-$7.85.

The company now expects 2026 free cash flow of $9.1 billion to $9.4 billion, up from its previous $8.9 billion-$9.2 billion range, with conversion remaining above 100%.

For Commercial Engines & Services, management expects revenue to grow in the low-20% range and operating profit to reach $10.5 billion to $10.6 billion. Defense & Propulsion Technologies is expected to deliver low-double-digit revenue growth and operating profit of $1.6 billion to $1.7 billion. GE Aerospace also forecasts a full-year adjusted effective tax rate of about 16%, compared with its previous expectation of less than 16.5%.

The company repurchased $2.0 billion of shares during the third quarter and expects about 1.05 billion diluted shares for 2026, versus 1.068 billion in 2025. Cash and short-term liquidity investments totaled $10.3 billion as of Sept. 30.

GE Aerospace continues to invest more than $3 billion annually in research and development and has agreed to acquire Consolidated Precision Products to support delivery capacity and technology development. The company said it plans to refinance maturities from 2026 onward and issue new debt in 2027 to partially fund the acquisition.

Execution risks highlighted by the results include working-capital demands, inflation and business mix, which partly offset volume and pricing benefits during the quarter. The company also cautioned that its guidance and other forward-looking projections are based on current estimates and remain subject to uncertainty, with actual results potentially differing materially.