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GE Aerospace Q3 Earnings Beat on Commercial Services Strength
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Key Takeaways
GE Aerospace's Q3 adjusted EPS rose 36% to $2.25, beating estimates by 11.4%.
GE Aerospace's total orders jumped 49% to $18.99 billion, led by commercial engine demand.
GE raised 2026 adjusted EPS view to $8.00-$8.10 and free cash flow projection to $9.1-$9.4 billion.
GE Aerospace (GE - Free Report) reported third-quarter 2026 adjusted earnings of $2.25 per share, up 36% year over year. The figure beat the Zacks Consensus Estimate of $2.02 by 11.4%. Strong commercial services activity and higher equipment deliveries supported results.
GE’s total revenues rose 16% year over year to $14.12 billion. Adjusted revenues increased 18% to $13.29 billion, surpassing the consensus mark of $12.65 billion by 5.1%. Total orders jumped 49% to $18.99 billion, highlighting strong demand across the business.
GE Orders Surge on Commercial Engine Demand
Commercial Engines & Services (“CES”) segment’s orders rose 58% year over year to $15.27 billion, as services orders increased 23% and equipment orders more than tripled. Defense & Propulsion Technologies (“DPT”) segment’s orders advanced 18% to $4.27 billion.
GE Aerospace announced commitments for more than 1,800 engines at the Farnborough International Airshow, including an agreement covering more than 1,000 LEAP-1A engines with IndiGo. It also inked an agreement with Turkish Airlines for more than 300 LEAP-1B engines and a long-term services agreement.
GE Aerospace Gains From Commercial Services
CES’ revenues increased 21% year over year to $10.34 billion in the third quarter of 2026. Services revenues rose 17%, supported by 12% growth in internal shop visit revenues. Shop visit activity benefited from higher volume, including LEAP growth of more than 40%, and heavier maintenance work.
Spare parts revenues climbed more than 20%. Equipment revenues advanced 38%, reflecting 8% growth in engine deliveries, including a 5% increase in LEAP deliveries, and higher GEnx volume. Segment operating profit rose 21% to $2.89 billion, while operating margin narrowed 10 basis points to 27.9% due to mix and inflation.
GE Defense Business Adds Volume and Pricing
DPT’s revenues grew 7% year over year to $3.47 billion in the third quarter. Defense & Systems revenues rose 5% on higher services and equipment demand, including a 4% increase in engine deliveries.
Propulsion & Additive Technologies revenues increased 10%, driven by Avio Aero and Unison. Segment operating profit rose 8% to $475 million, while operating margin improved 20 basis points to 13.7%. Higher volume and pricing offset some pressure from sales mix and inflation.
GE Aerospace's combined cost of equipment and services sold increased to $9.10 billion from $7.76 billion a year earlier. Selling, general and administrative expenses fell to $1.11 billion from $1.20 billion, while research and development costs rose to $458 million from $415 million.
Adjusted operating profit climbed 30% year over year to $2.99 billion. Adjusted operating margin expanded 220 basis points to 22.5%. On a GAAP basis, profit rose 12% to $2.81 billion, but the profit margin narrowed 80 basis points to 19.9%, reflecting different items included in the results.
GE Cash Flow Slips Despite Strong Earnings
GE ended the September quarter with $8.76 billion in cash, cash equivalents and restricted cash. Total borrowings were $19.33 billion, including $2.34 billion of short-term debt and $16.99 billion of long-term borrowings. The company's total remaining performance obligations reached $212.08 billion.
GE’s third-quarter cash from operating activities fell 14% year over year to $2.20 billion, while free cash flow declined 14% to $2.04 billion. In the first nine months of 2026, free cash flow increased 13% to $6.73 billion. GE repurchased $2.0 billion of shares in the quarter.
GE Aerospace Raises 2026 Guidance Again
GE now expects 2026 adjusted revenue growth of approximately 19-20% compared with its prior high-teens forecast. Adjusted operating profit is projected to be in the band of $10.9-$11.0 billion, up from $10.55-$10.75 billion. The adjusted earnings outlook increased to $8.00-$8.10 per share from $7.65-$7.85.
Free cash flow is expected between $9.1 billion and $9.4 billion versus $8.9-$9.2 billion earlier. CES’ revenues are projected to grow at a low-20s rate, with operating profit of $10.5-$10.6 billion. DPT’s revenues are projected to rise at a low-double-digit pace, with operating profit of $1.6-$1.7 billion.
RTX Corporation’s (RTX - Free Report) third-quarter 2026 adjusted earnings per share (EPS) of $2.26 beat the Zacks Consensus Estimate of $1.78 by 27%. The bottom line improved 32.9% from the year-ago quarter’s level of $1.70.
Revenues rose 11.1% year over year to $24.97 billion and beat the consensus mark of $24.01 billion by 4%. Growth was supported by higher commercial aftermarket and defense demand.
Northrop Grumman Corporation (NOC - Free Report) reported third-quarter 2026 adjusted earnings of $7.89 per share, which beat the Zacks Consensus Estimate of $7.22 by 9.3%. The bottom line also increased 2.9% from the year-ago quarter’s level of $7.67.
NOC’s total sales of $11.12 billion in the third quarter beat the Zacks Consensus Estimate of $11.06 billion by 0.6%. The top line also improved 6.7% from $10.42 billion in the year-ago quarter.
Grupo Aeromexico, S.A.B. de C.V (AERO - Free Report) reported $1.62 billion in revenues in the third quarter of 2026, representing no change year over year. EPS was 28 cents compared with breakeven earnings a year ago.
Reported revenues exceeded the Zacks Consensus Estimate of $1.61 billion by 0.62%. EPS missed the consensus mark of $0.29, delivering an average negative surprise of 3.45%.
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GE Aerospace Q3 Earnings Beat on Commercial Services Strength
Key Takeaways
GE Aerospace (GE - Free Report) reported third-quarter 2026 adjusted earnings of $2.25 per share, up 36% year over year. The figure beat the Zacks Consensus Estimate of $2.02 by 11.4%. Strong commercial services activity and higher equipment deliveries supported results.
GE’s total revenues rose 16% year over year to $14.12 billion. Adjusted revenues increased 18% to $13.29 billion, surpassing the consensus mark of $12.65 billion by 5.1%. Total orders jumped 49% to $18.99 billion, highlighting strong demand across the business.
GE Orders Surge on Commercial Engine Demand
Commercial Engines & Services (“CES”) segment’s orders rose 58% year over year to $15.27 billion, as services orders increased 23% and equipment orders more than tripled. Defense & Propulsion Technologies (“DPT”) segment’s orders advanced 18% to $4.27 billion.
GE Aerospace announced commitments for more than 1,800 engines at the Farnborough International Airshow, including an agreement covering more than 1,000 LEAP-1A engines with IndiGo. It also inked an agreement with Turkish Airlines for more than 300 LEAP-1B engines and a long-term services agreement.
GE Aerospace Gains From Commercial Services
CES’ revenues increased 21% year over year to $10.34 billion in the third quarter of 2026. Services revenues rose 17%, supported by 12% growth in internal shop visit revenues. Shop visit activity benefited from higher volume, including LEAP growth of more than 40%, and heavier maintenance work.
Spare parts revenues climbed more than 20%. Equipment revenues advanced 38%, reflecting 8% growth in engine deliveries, including a 5% increase in LEAP deliveries, and higher GEnx volume. Segment operating profit rose 21% to $2.89 billion, while operating margin narrowed 10 basis points to 27.9% due to mix and inflation.
GE Defense Business Adds Volume and Pricing
DPT’s revenues grew 7% year over year to $3.47 billion in the third quarter. Defense & Systems revenues rose 5% on higher services and equipment demand, including a 4% increase in engine deliveries.
Propulsion & Additive Technologies revenues increased 10%, driven by Avio Aero and Unison. Segment operating profit rose 8% to $475 million, while operating margin improved 20 basis points to 13.7%. Higher volume and pricing offset some pressure from sales mix and inflation.
GE Aerospace Price, Consensus and EPS Surprise
GE Aerospace price-consensus-eps-surprise-chart | GE Aerospace Quote
GE Aerospace Expands Operating Margins
GE Aerospace's combined cost of equipment and services sold increased to $9.10 billion from $7.76 billion a year earlier. Selling, general and administrative expenses fell to $1.11 billion from $1.20 billion, while research and development costs rose to $458 million from $415 million.
Adjusted operating profit climbed 30% year over year to $2.99 billion. Adjusted operating margin expanded 220 basis points to 22.5%. On a GAAP basis, profit rose 12% to $2.81 billion, but the profit margin narrowed 80 basis points to 19.9%, reflecting different items included in the results.
GE Cash Flow Slips Despite Strong Earnings
GE ended the September quarter with $8.76 billion in cash, cash equivalents and restricted cash. Total borrowings were $19.33 billion, including $2.34 billion of short-term debt and $16.99 billion of long-term borrowings. The company's total remaining performance obligations reached $212.08 billion.
GE’s third-quarter cash from operating activities fell 14% year over year to $2.20 billion, while free cash flow declined 14% to $2.04 billion. In the first nine months of 2026, free cash flow increased 13% to $6.73 billion. GE repurchased $2.0 billion of shares in the quarter.
GE Aerospace Raises 2026 Guidance Again
GE now expects 2026 adjusted revenue growth of approximately 19-20% compared with its prior high-teens forecast. Adjusted operating profit is projected to be in the band of $10.9-$11.0 billion, up from $10.55-$10.75 billion. The adjusted earnings outlook increased to $8.00-$8.10 per share from $7.65-$7.85.
Free cash flow is expected between $9.1 billion and $9.4 billion versus $8.9-$9.2 billion earlier. CES’ revenues are projected to grow at a low-20s rate, with operating profit of $10.5-$10.6 billion. DPT’s revenues are projected to rise at a low-double-digit pace, with operating profit of $1.6-$1.7 billion.
GE’s Zacks Rank
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.
Performance of Other Companies
RTX Corporation’s (RTX - Free Report) third-quarter 2026 adjusted earnings per share (EPS) of $2.26 beat the Zacks Consensus Estimate of $1.78 by 27%. The bottom line improved 32.9% from the year-ago quarter’s level of $1.70.
Revenues rose 11.1% year over year to $24.97 billion and beat the consensus mark of $24.01 billion by 4%. Growth was supported by higher commercial aftermarket and defense demand.
Northrop Grumman Corporation (NOC - Free Report) reported third-quarter 2026 adjusted earnings of $7.89 per share, which beat the Zacks Consensus Estimate of $7.22 by 9.3%. The bottom line also increased 2.9% from the year-ago quarter’s level of $7.67.
NOC’s total sales of $11.12 billion in the third quarter beat the Zacks Consensus Estimate of $11.06 billion by 0.6%. The top line also improved 6.7% from $10.42 billion in the year-ago quarter.
Grupo Aeromexico, S.A.B. de C.V (AERO - Free Report) reported $1.62 billion in revenues in the third quarter of 2026, representing no change year over year. EPS was 28 cents compared with breakeven earnings a year ago.
Reported revenues exceeded the Zacks Consensus Estimate of $1.61 billion by 0.62%. EPS missed the consensus mark of $0.29, delivering an average negative surprise of 3.45%.