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GE Aerospace Q2 Earnings Beat on Robust Commercial Services Growth
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Key Takeaways
GE reported Q2 2026 adjusted EPS of $2.02, topping estimates as adjusted revenues rose 24% year over year.
GE secured major engine orders, while commercial services and aftermarket demand lifted CES results.
GE raised 2026 revenue, profit, EPS and free cash flow guidance following strong first-half performance.
GE Aerospace (GE - Free Report) reported second-quarter 2026 adjusted earnings of $2.02 per share, up 22% year over year. The figure beat the Zacks Consensus Estimate of $1.86 by 8.6%.
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 $13.35 billion, reflecting a year-over-year increase of 21%. Adjusted revenues came in at $12.63 billion, which rose 24% year over year and surpassed the consensus mark of $11.86 billion by 6.5%. Robust commercial services activity supported the results.
GE Orders Gain on Strong Customer Demand
Total orders increased 17% year over year to $16.5 billion. The company secured several commercial and defense wins, including an agreement with Copa Airlines for up to 120 LEAP-1B engines.
GE also received orders from Turkish Aerospace for F404 engines and Leonardo Helicopters for CT7 engines.
CES Growth Fueled by Shop Visits and Parts
The Commercial Engines & Services (CES) segment’s revenues rose 27% year over year to $9.73 billion in the second quarter of 2026. The gain was driven by services growth of 26%, with internal shop visit revenues up 25%. Spare parts revenues increased more than 25%, reflecting robust aftermarket demand.
Equipment revenues in CES advanced 30%, supported by unit volume growth of 26%, including a 24% increase in LEAP deliveries. Segment operating profit increased 20% to $2.66 billion, though the operating margin narrowed 160 basis points to 27.3% as installed engine growth, including GE9X, investments and inflation weighed on profitability. Total orders in the segment rose 18% year over year to $12.93 billion.
Defense Segment Adds Volume and Pricing Support
The Defense & Propulsion Technologies segment’s revenues increased 16% year over year to $3.44 billion in the second quarter of 2026. Defense & Systems revenues were up 12%, driven by growth in both services and equipment, including unit deliveries rising 7%.
Propulsion & Additive Technologies revenues grew 23%, led by Avio Aero. The segment’s operating profit rose 18% to $475 million. The operating margin expanded 30 basis points to 13.8%, as higher volume and pricing more than offset the effects of mix, investments and inflation. Total orders for the segment advanced 12% year over year to $4.14 billion.
GE Aerospace’s cost of sales, comprising costs of equipment and services sold, increased 26.7% year over year to $8.67 billion. Selling, general and administrative expenses rose 10.9% year over year to $1.13 billion. Research and development expenses totaled $460 million, reflecting a year-over-year increase of 28.1%.
In the second quarter, the company’s operating profit increased 18% year over year to $2.75 billion, while the operating profit margin contracted 130 basis points to 21.7%.
GE Aerospace Generates Strong Cash Flow
GE ended June with $9.35 billion in cash, cash equivalents and restricted cash. Total borrowings were $19.16 billion, including $2 billion of short-term debt and $17.16 billion of long-term borrowings.
In the first six months of 2026, cash from operating activities surged 39% year over year to $3.26 billion. Free cash flow increased 43% to $3.03 billion, reflecting stronger earnings and cash conversion.
The company repurchased 14.1 million shares for roughly $4.22 billion during the period. Its remaining authorization under the $20 billion share-repurchase program was approximately $17.99 billion.
GE Raises 2026 Guidance Across the Board
GE now expects 2026 adjusted revenue growth in the high-teens range, up from its prior low-double-digit outlook. Operating profit is projected between $10.55 billion and $10.75 billion compared with the previous forecast of $9.85-$10.25 billion.
Adjusted earnings are expected in the range of $7.65-$7.85 per share, up from $7.10-$7.40 expected earlier. Free cash flow is forecast between $8.9 billion and $9.2 billion compared with the earlier projection of $8-$8.4 billion.
Commercial Engines & Services revenues are now expected to grow about 20%, with operating profit of $10.25-$10.35 billion. Defense & Propulsion Technologies revenues are forecast to rise at a low-double-digit rate, with operating profit between $1.6 billion and $1.7 billion.
A couple of other top-ranked stocks from the same space are discussed below:
General Dynamics Corporation (GD - Free Report) presently carries a Zacks Rank of 2. General Dynamics’ earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 5.3%.
In the past 60 days, the Zacks Consensus Estimate for GD’s 2026 earnings has inched up 0.1%.
Lockheed Martin Corporation (LMT - Free Report) currently carries a Zacks Rank of 2. Lockheed Martin’s earnings surpassed the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 9.4%.
In the past 60 days, the Zacks Consensus Estimate for LMT’s 2026 earnings has inched up a penny.
View the Zacks #1 Rank List
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GE Aerospace Q2 Earnings Beat on Robust Commercial Services Growth
Key Takeaways
GE Aerospace (GE - Free Report) reported second-quarter 2026 adjusted earnings of $2.02 per share, up 22% year over year. The figure beat the Zacks Consensus Estimate of $1.86 by 8.6%.
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 $13.35 billion, reflecting a year-over-year increase of 21%. Adjusted revenues came in at $12.63 billion, which rose 24% year over year and surpassed the consensus mark of $11.86 billion by 6.5%. Robust commercial services activity supported the results.
GE Orders Gain on Strong Customer Demand
Total orders increased 17% year over year to $16.5 billion. The company secured several commercial and defense wins, including an agreement with Copa Airlines for up to 120 LEAP-1B engines.
GE also received orders from Turkish Aerospace for F404 engines and Leonardo Helicopters for CT7 engines.
CES Growth Fueled by Shop Visits and Parts
The Commercial Engines & Services (CES) segment’s revenues rose 27% year over year to $9.73 billion in the second quarter of 2026. The gain was driven by services growth of 26%, with internal shop visit revenues up 25%. Spare parts revenues increased more than 25%, reflecting robust aftermarket demand.
Equipment revenues in CES advanced 30%, supported by unit volume growth of 26%, including a 24% increase in LEAP deliveries. Segment operating profit increased 20% to $2.66 billion, though the operating margin narrowed 160 basis points to 27.3% as installed engine growth, including GE9X, investments and inflation weighed on profitability. Total orders in the segment rose 18% year over year to $12.93 billion.
Defense Segment Adds Volume and Pricing Support
The Defense & Propulsion Technologies segment’s revenues increased 16% year over year to $3.44 billion in the second quarter of 2026. Defense & Systems revenues were up 12%, driven by growth in both services and equipment, including unit deliveries rising 7%.
Propulsion & Additive Technologies revenues grew 23%, led by Avio Aero. The segment’s operating profit rose 18% to $475 million. The operating margin expanded 30 basis points to 13.8%, as higher volume and pricing more than offset the effects of mix, investments and inflation. Total orders for the segment advanced 12% year over year to $4.14 billion.
GE Aerospace Price, Consensus and EPS Surprise
GE Aerospace price-consensus-eps-surprise-chart | GE Aerospace Quote
GE Profit Rises Despite Margin Pressure
GE Aerospace’s cost of sales, comprising costs of equipment and services sold, increased 26.7% year over year to $8.67 billion. Selling, general and administrative expenses rose 10.9% year over year to $1.13 billion. Research and development expenses totaled $460 million, reflecting a year-over-year increase of 28.1%.
In the second quarter, the company’s operating profit increased 18% year over year to $2.75 billion, while the operating profit margin contracted 130 basis points to 21.7%.
GE Aerospace Generates Strong Cash Flow
GE ended June with $9.35 billion in cash, cash equivalents and restricted cash. Total borrowings were $19.16 billion, including $2 billion of short-term debt and $17.16 billion of long-term borrowings.
In the first six months of 2026, cash from operating activities surged 39% year over year to $3.26 billion. Free cash flow increased 43% to $3.03 billion, reflecting stronger earnings and cash conversion.
The company repurchased 14.1 million shares for roughly $4.22 billion during the period. Its remaining authorization under the $20 billion share-repurchase program was approximately $17.99 billion.
GE Raises 2026 Guidance Across the Board
GE now expects 2026 adjusted revenue growth in the high-teens range, up from its prior low-double-digit outlook. Operating profit is projected between $10.55 billion and $10.75 billion compared with the previous forecast of $9.85-$10.25 billion.
Adjusted earnings are expected in the range of $7.65-$7.85 per share, up from $7.10-$7.40 expected earlier. Free cash flow is forecast between $8.9 billion and $9.2 billion compared with the earlier projection of $8-$8.4 billion.
Commercial Engines & Services revenues are now expected to grow about 20%, with operating profit of $10.25-$10.35 billion. Defense & Propulsion Technologies revenues are forecast to rise at a low-double-digit rate, with operating profit between $1.6 billion and $1.7 billion.
Zacks Rank and Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A couple of other top-ranked stocks from the same space are discussed below:
General Dynamics Corporation (GD - Free Report) presently carries a Zacks Rank of 2. General Dynamics’ earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 5.3%.
In the past 60 days, the Zacks Consensus Estimate for GD’s 2026 earnings has inched up 0.1%.
Lockheed Martin Corporation (LMT - Free Report) currently carries a Zacks Rank of 2. Lockheed Martin’s earnings surpassed the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 9.4%.
In the past 60 days, the Zacks Consensus Estimate for LMT’s 2026 earnings has inched up a penny.