General Electric Company (GE) - 10-Q Summary
Business Context and Reporting Period
This filing is a Quarterly Report (Form 10-Q) for General Electric Company, operating as GE Aerospace, for the period ended March 31, 2026. The Company is a global aerospace leader with an installed base of approximately 50,000 commercial and 30,000 military engines. Effective January 15, 2026, the Company reorganized its segments: the Commercial Engines & Services (CES) segment now encompasses the entire commercial engine lifecycle, while the Aeroderivative business was moved to the Defense & Propulsion Technologies (DPT) segment.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenue | $12,392 million | $9,935 million |
| Net Income (Continuing Ops) | $1,930 million | $1,967 million |
| Diluted EPS (Continuing Ops) | $1.83 | $1.83 |
| Adjusted Net Income (Non-GAAP) | $1,963 million | $1,601 million |
| Adjusted EPS (Non-GAAP) | $1.86 | $1.49 |
| Operating Profit (Non-GAAP) | $2,528 million | $2,146 million |
| Free Cash Flow (Non-GAAP) | $1,658 million | $1,451 million |
| Cash & Equivalents | $11.0 billion | $12.4 billion (Dec 2025) |
| Total Borrowings | $20.3 billion | $20.5 billion (Dec 2025) |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 25% year-over-year to $12.4 billion, driven by a 23% increase in equipment revenue (due to higher engine deliveries and pricing) and a 31% increase in services revenue (due to higher shop visit volume and spare parts).
- Profitability: GAAP net income from continuing operations was flat compared to Q1 2025. However, Adjusted Net Income increased 23% to $2.0 billion, driven by a $0.5 billion increase in segment profit. This was partially offset by a $0.3 billion loss on retained and sold ownership interests (specifically an unrealized loss on BETA Technologies) and higher corporate costs.
- Segment Performance:
- CES: Revenue up 34% to $8.9 billion; profit up 23% to $2.4 billion. Internal shop visit revenue grew 35%.
- DPT: Revenue up 19% to $3.2 billion; profit up 17% to $379 million.
- Backlog: Remaining Performance Obligation (RPO) increased 11% to $211.3 billion, reflecting strong contract modifications and new orders.
Guidance, Outlook, and Risks
- Outlook: Management expects a significant ramp in engine unit and service deliveries for newer platforms. The Company plans to invest $1 billion in U.S. manufacturing and hire 5,000 U.S. workers in 2026.
- Capital Allocation: The Board approved a new $20 billion share repurchase authorization in December 2025. In Q1 2026, the Company repurchased 7.2 million shares for $2.2 billion.
- Credit Ratings: Moody's upgraded the long-term rating to A2 (from A3) in February 2026. S&P revised the outlook to positive in April 2026, affirming the A- rating.
- Risks & Contingencies:
- Geopolitics: Monitoring the conflict in the Middle East for potential impacts on fuel prices and airline utilization, though no material impact was recorded in Q1 2026.
- Tariffs: The Supreme Court ruled against tariffs under IEEPA in 2026; the Company has not yet recorded a benefit for potential refunds.
- Discontinued Operations: Bank BPH (Poland) litigation losses are estimated at $2.09 billion as of March 31, 2026. No incremental contributions were required in Q1 2026.
- Tax: The IRS is auditing 2016-2020 returns; the Company believes accrued amounts are sufficient but cannot estimate potential additional taxes.
Investor Verification Checklist
- Non-GAAP Adjustments: Verify the $309 million unrealized loss on BETA Technologies equity securities included in "Other income (loss)" which significantly impacted GAAP net income but was excluded from Adjusted Net Income.
- Segment Reclassification: Confirm understanding of the January 2026 segment changes (Aeroderivative moved from CES to DPT) when comparing historical data.
- Bank BPH Exposure: Monitor the $2.09 billion estimated loss reserve for Bank BPH litigation and any potential future capital contribution requirements.
- Share Repurchases: Track the execution of the new $20 billion repurchase authorization approved in late 2025.
- Tariff Refunds: Watch for future filings regarding the recognition of benefits from the Supreme Court ruling on IEEPA tariffs.