GE Aerospace GE 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 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 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 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.
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GE Aerospace (GE): Free Stock Analysis Report
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GE Vernova Inc. (GEV): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).