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Strength in Defense & Propulsion Unit Drives GE Aerospace: Can It Sustain?
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Key Takeaways
GE Aerospace's Defense & Propulsion revenues rose 16% in Q2 after growing 19% in the first quarter.
GE secured key defense contracts while segment orders climbed 12% and operating profit rose 18%.
GE expects Defense & Propulsion revenues to grow in the low-double-digit range in 2026.
GE Aerospace (GE - Free Report) is witnessing strong momentum in its Defense & Propulsion Technologies segment. After experiencing growth of 19% in first-quarter 2026, revenues from the segment increased 16% year over year in the second quarter. The surge in revenues was driven by the growing popularity of GE’s propulsion & additive technologies, critical aircraft systems and aftermarket services in the defense sector.
Some of the notable contracts secured by the company include a contract from Turkish Aerospace Industries to continue integrating its F404 engine into Türkiye's Hurjet jet trainer. It also clinched a deal from Boeing Defence UK for the extension of support services for T700-GE-T701D engines. GE will be responsible for providing logistics management, repair, maintenance and technical support services for these turboshaft engines. Apart from this, it entered into a multi-year partnership with Palantir Technologies Inc. (PLTR) to improve the fleet management and operational readiness of the U.S. Air Force’s military aircraft.
The strong pipeline of projects boosted the Defense & Propulsion Technologies segment’s orders, which increased 12% in the second quarter on a year-over-year basis. The segment’s operating profit grew 18% to $475 million.
Backed by favorable geopolitical developments and consistent government support, the company’s Defense & Propulsion Technologies segment is well-placed for growth in the quarters ahead. For 2026, GE expects revenues from the Defense & Propulsion Technologies segment to increase in the low-double-digit range.
GE's Peers in the Defense Market
Howmet Aerospace Inc. (HWM - Free Report) is benefiting from strong momentum in its defense aerospace market. After experiencing growth of 10% in first-quarter 2026, revenues from the defense aerospace market increased 11% year over year in the second quarter. The surge in revenues was driven by the solid demand for engine spares, particularly related to the F-35 program, and an increase in orders for legacy fighter jet spares.
Northrop Grumman’s (NOC - Free Report) defense market is playing an important role in driving its overall growth. In second-quarter 2026, revenues from Northrop’s Defense Systems segment climbed 5.1% year over year to $2.09 billion. This improvement was driven by the continued ramp-up of the Sentinel program, as well as the higher volume of tactical solid rocket motor programs and the Integrated Battle Command System portfolio.
GE's Price Performance, Valuation and Estimates
Shares of GE Aerospace have gained 25.3% in the past three months compared with the industry’s 11.2% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, GE is trading at a forward price-to-earnings ratio of 42.68X, above the industry’s average of 34.39X. GE Aerospace carries a Value Score of D.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for GE’s 2026 and 2027 earnings has increased over the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
Strength in Defense & Propulsion Unit Drives GE Aerospace: Can It Sustain?
Key Takeaways
GE Aerospace (GE - Free Report) is witnessing strong momentum in its Defense & Propulsion Technologies segment. After experiencing growth of 19% in first-quarter 2026, revenues from the segment increased 16% year over year in the second quarter. The surge in revenues was driven by the growing popularity of GE’s propulsion & additive technologies, critical aircraft systems and aftermarket services in the defense sector.
Some of the notable contracts secured by the company include a contract from Turkish Aerospace Industries to continue integrating its F404 engine into Türkiye's Hurjet jet trainer. It also clinched a deal from Boeing Defence UK for the extension of support services for T700-GE-T701D engines. GE will be responsible for providing logistics management, repair, maintenance and technical support services for these turboshaft engines. Apart from this, it entered into a multi-year partnership with Palantir Technologies Inc. (PLTR) to improve the fleet management and operational readiness of the U.S. Air Force’s military aircraft.
The strong pipeline of projects boosted the Defense & Propulsion Technologies segment’s orders, which increased 12% in the second quarter on a year-over-year basis. The segment’s operating profit grew 18% to $475 million.
Backed by favorable geopolitical developments and consistent government support, the company’s Defense & Propulsion Technologies segment is well-placed for growth in the quarters ahead. For 2026, GE expects revenues from the Defense & Propulsion Technologies segment to increase in the low-double-digit range.
GE's Peers in the Defense Market
Howmet Aerospace Inc. (HWM - Free Report) is benefiting from strong momentum in its defense aerospace market. After experiencing growth of 10% in first-quarter 2026, revenues from the defense aerospace market increased 11% year over year in the second quarter. The surge in revenues was driven by the solid demand for engine spares, particularly related to the F-35 program, and an increase in orders for legacy fighter jet spares.
Northrop Grumman’s (NOC - Free Report) defense market is playing an important role in driving its overall growth. In second-quarter 2026, revenues from Northrop’s Defense Systems segment climbed 5.1% year over year to $2.09 billion. This improvement was driven by the continued ramp-up of the Sentinel program, as well as the higher volume of tactical solid rocket motor programs and the Integrated Battle Command System portfolio.
GE's Price Performance, Valuation and Estimates
Shares of GE Aerospace have gained 25.3% in the past three months compared with the industry’s 11.2% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, GE is trading at a forward price-to-earnings ratio of 42.68X, above the industry’s average of 34.39X. GE Aerospace carries a Value Score of D.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for GE’s 2026 and 2027 earnings has increased over the past 60 days.
Image Source: Zacks Investment Research
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.