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GE Aerospace Q1 Earnings & Revenues Beat Estimates, Rise Y/Y
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Key Takeaways
GE Aerospace Q1 EPS rose 24.8% to $1.86, beating estimates, revenues climbed 25% to $12.4B.
GE saw orders surge 87% to $23B, with CES revenues up 34% on strong services demand.
Margins slipped as costs rose, GE still expects low-double-digit revenue growth for 2026.
GE Aerospace (GE - Free Report) posted first-quarter 2026 adjusted earnings of $1.86 per share, which increased 25% year over year and beat the Zacks Consensus Estimate of $1.61 by 15.5%.
It is worth noting that in April 2024, GE Aerospace emerged as a separate public company, following the spin-off of GE Vernova Inc. (GEV - Free Report) from General Electric.
Total revenues were $12.4 billion, reflecting a year-over-year increase of 25%. Adjusted revenues came in at $11.61 billion, which rose 29% year over year and surpassed the consensus mark of $10.64 billion by 9.1%. Results were supported by stronger commercial services activity, while management cited a $170 billion commercial services backlog that helps underpin demand visibility.
GE’s Orders Jump as Commercial Activity Accelerates
In the first quarter of 2026, GE’s total orders climbed 87% year over year to $23 billion. Commercial wins included agreements for more than 650 engines, featuring commitments tied to LEAP-1A and GEnx platforms, alongside a long-term materials agreement to support Ryanair’s fleet of about 2,000 CFM56 and LEAP engines.
Operationally, GE pointed to progress under its FLIGHT DECK lean model, including supplier improvements that contributed to commercial services revenues rising 39% year over year. Total engine deliveries increased 43% from the prior-year quarter, indicating better throughput as the company works through customer demand.
Commercial Engines & Services (CES) revenues rose 34% year over year to $8.92 billion in the first quarter of fiscal 2026. The gain was driven by the services growth of 39%, with internal shop visit revenues up 35% on higher volume and workscopes. Spare parts revenues increased more than 25%, reflecting robust aftermarket demand.
Equipment revenues in CES advanced 20%, supported by unit volume growth of 50% that was partly offset by customer mix. Segment operating profit increased 23% to $2.36 billion, though the operating margin narrowed 230 basis points to 26.4% as install engine growth, including GE9X, and investments weighed on mix. Total orders in the segment rose 93% year over year to $17.3 billion.
Defense Segment Adds Volume and Pricing Support
Defense & Propulsion Technologies revenues increased 19% year over year to $3.2 billion in the first quarter of 2026. Management highlighted momentum in Defense & Systems and Propulsion & Additive Technologies, with Defense & Systems revenues up 14% on growth in both services and equipment, including unit deliveries rising 24%.
Propulsion & Additive Technologies revenues grew 29%, led by Avio Aero. The segment’s operating profit rose 17% to $379 million. The operating margin edged down 20 basis points to 11.8%, as mix, investments and inflation offset some of the benefits from higher volume and pricing. Total orders for the segment advanced 67% year over year to $6.17 billion.
GE’s Margin Profile
GE Aerospace’s cost of sales (comprising costs of equipment and services sold) surged 32% year over year at $7.9 billion. Selling, general and administrative expenses increased 23.7% year over year to $1.08 billion. Research and development expenses totaled $440 million, reflecting a year-over-year rise of 22.6%.
In the first quarter, the company’s operating profit increased 18% year over year to $2.53 billion, while operating profit margin contracted 200 basis points to 21.8%. In the first three months of 2025, GE’s cash from operating activities rose 21% to $1.87 billion. Free cash flow increased 14% to $1.66 billion, indicating continued cash conversion despite higher activity levels.
GE Aerospace’s Balance Sheet & Cash Flow
GE ended the quarter with cash, cash equivalents and restricted cash of $10.98 billion. Total borrowings were $20.3 billion, comprising $2.1 billion of short-term borrowings and $18.2 billion of long-term borrowings.
During the quarter, GE repurchased 7.2 million shares for $2.2 billion, underscoring its capital return posture alongside investment needs.
GE’s Outlook
For full-year 2026, GE maintained its prior outlook while noting it is trending toward the higher end of the range.
The company continues to expect adjusted revenues to grow in the low-double-digit range from the year-ago period's actual. Operating profit is estimated to be in the band of $9.85-$10.25 billion. Adjusted earnings are predicted to be in the range of $7.10-$7.40 per share. The free cash flow is anticipated to be in the band of $8.0-$8.4 billion, with the conversion rate projected to be more than 100%.
GE Aerospace expects the Commercial Engines & Services segment’s revenues to grow in the mid-teens range, whereas operating profit is anticipated to be in the band of $9.60-$9.90 billion. For the Defense & Propulsion Technologies segment, revenues are projected to increase in the mid-to-high single-digit range, whereas operating profit is anticipated to be in the band of $1.55-$1.65 billion.
A couple of better-ranked stocks from the same space are discussed below:
Textron (TXT - Free Report) presently carries a Zacks Rank #2 (Buy). Textron’s earnings surpassed the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 5.3%. In the past 60 days, the Zacks Consensus Estimate for TXT’s 2026 earnings has inched up 0.3%.
Northrop Grumman (NOC - Free Report) currently carries a Zacks Rank of 2. Northrop Grumman’s earnings surpassed the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 6.3%. In the past 60 days, the Zacks Consensus Estimate for NOC’s 2026 earnings has inched up by a penny.
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GE Aerospace Q1 Earnings & Revenues Beat Estimates, Rise Y/Y
Key Takeaways
GE Aerospace (GE - Free Report) posted first-quarter 2026 adjusted earnings of $1.86 per share, which increased 25% year over year and beat the Zacks Consensus Estimate of $1.61 by 15.5%.
It is worth noting that in April 2024, GE Aerospace emerged as a separate public company, following the spin-off of GE Vernova Inc. (GEV - Free Report) from General Electric.
Total revenues were $12.4 billion, reflecting a year-over-year increase of 25%. Adjusted revenues came in at $11.61 billion, which rose 29% year over year and surpassed the consensus mark of $10.64 billion by 9.1%. Results were supported by stronger commercial services activity, while management cited a $170 billion commercial services backlog that helps underpin demand visibility.
GE’s Orders Jump as Commercial Activity Accelerates
In the first quarter of 2026, GE’s total orders climbed 87% year over year to $23 billion. Commercial wins included agreements for more than 650 engines, featuring commitments tied to LEAP-1A and GEnx platforms, alongside a long-term materials agreement to support Ryanair’s fleet of about 2,000 CFM56 and LEAP engines.
Operationally, GE pointed to progress under its FLIGHT DECK lean model, including supplier improvements that contributed to commercial services revenues rising 39% year over year. Total engine deliveries increased 43% from the prior-year quarter, indicating better throughput as the company works through customer demand.
GE Aerospace Price, Consensus and EPS Surprise
GE Aerospace price-consensus-eps-surprise-chart | GE Aerospace Quote
CES Growth Fueled by Shop Visits and Parts
Commercial Engines & Services (CES) revenues rose 34% year over year to $8.92 billion in the first quarter of fiscal 2026. The gain was driven by the services growth of 39%, with internal shop visit revenues up 35% on higher volume and workscopes. Spare parts revenues increased more than 25%, reflecting robust aftermarket demand.
Equipment revenues in CES advanced 20%, supported by unit volume growth of 50% that was partly offset by customer mix. Segment operating profit increased 23% to $2.36 billion, though the operating margin narrowed 230 basis points to 26.4% as install engine growth, including GE9X, and investments weighed on mix. Total orders in the segment rose 93% year over year to $17.3 billion.
Defense Segment Adds Volume and Pricing Support
Defense & Propulsion Technologies revenues increased 19% year over year to $3.2 billion in the first quarter of 2026. Management highlighted momentum in Defense & Systems and Propulsion & Additive Technologies, with Defense & Systems revenues up 14% on growth in both services and equipment, including unit deliveries rising 24%.
Propulsion & Additive Technologies revenues grew 29%, led by Avio Aero. The segment’s operating profit rose 17% to $379 million. The operating margin edged down 20 basis points to 11.8%, as mix, investments and inflation offset some of the benefits from higher volume and pricing. Total orders for the segment advanced 67% year over year to $6.17 billion.
GE’s Margin Profile
GE Aerospace’s cost of sales (comprising costs of equipment and services sold) surged 32% year over year at $7.9 billion. Selling, general and administrative expenses increased 23.7% year over year to $1.08 billion. Research and development expenses totaled $440 million, reflecting a year-over-year rise of 22.6%.
In the first quarter, the company’s operating profit increased 18% year over year to $2.53 billion, while operating profit margin contracted 200 basis points to 21.8%. In the first three months of 2025, GE’s cash from operating activities rose 21% to $1.87 billion. Free cash flow increased 14% to $1.66 billion, indicating continued cash conversion despite higher activity levels.
GE Aerospace’s Balance Sheet & Cash Flow
GE ended the quarter with cash, cash equivalents and restricted cash of $10.98 billion. Total borrowings were $20.3 billion, comprising $2.1 billion of short-term borrowings and $18.2 billion of long-term borrowings.
During the quarter, GE repurchased 7.2 million shares for $2.2 billion, underscoring its capital return posture alongside investment needs.
GE’s Outlook
For full-year 2026, GE maintained its prior outlook while noting it is trending toward the higher end of the range.
The company continues to expect adjusted revenues to grow in the low-double-digit range from the year-ago period's actual. Operating profit is estimated to be in the band of $9.85-$10.25 billion. Adjusted earnings are predicted to be in the range of $7.10-$7.40 per share. The free cash flow is anticipated to be in the band of $8.0-$8.4 billion, with the conversion rate projected to be more than 100%.
GE Aerospace expects the Commercial Engines & Services segment’s revenues to grow in the mid-teens range, whereas operating profit is anticipated to be in the band of $9.60-$9.90 billion. For the Defense & Propulsion Technologies segment, revenues are projected to increase in the mid-to-high single-digit range, whereas operating profit is anticipated to be in the band of $1.55-$1.65 billion.
Zacks Rank and Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A couple of better-ranked stocks from the same space are discussed below:
Textron (TXT - Free Report) presently carries a Zacks Rank #2 (Buy). Textron’s earnings surpassed the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 5.3%. In the past 60 days, the Zacks Consensus Estimate for TXT’s 2026 earnings has inched up 0.3%.
Northrop Grumman (NOC - Free Report) currently carries a Zacks Rank of 2. Northrop Grumman’s earnings surpassed the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 6.3%. In the past 60 days, the Zacks Consensus Estimate for NOC’s 2026 earnings has inched up by a penny.