Overview
GE Aerospace
GE · NYSEQ3 2026Aerospace & Defense · Jet Engines and Aftermarket Services
Since the Report − 1.1%
Revenue grew 17.5% year over year, EPS beat the estimate by 12.5%; the stock fell 3.7% in its first reaction.
- RevenueAdjusted · Q3
- $13.29B
- ▲ 18% · Estimate $12.85B · 3.4% Beat
- EPSAdjusted
- $2.25
- ▲ 36% · Estimate $2.00 · 12.5% Beat
Verdict
BUYGE Aerospace beat third-quarter estimates by 3.4% on revenue and 12.5% on adjusted earnings per share, and raised its 2026 guidance across the board. The stock still closed down 3.7%; free cash flow dropped 14% and the fourth quarter implied by the full-year target fell short of expectations. The next thing to watch is how quickly strong orders turn into cash.
Close on Report DayOct 20
$299.87▼ 3.7%Report-Day Move
- Market Cap(Today)
- ≈ $306 B
- 1Y Return(At Report)
- − 1%
- P/E(At Today's Price · $7.70 · Trailing 12M)
- 38.5
- PEG(Company Guidance 2026)
- 1.46
- Net Margin(Trailing 12M)
- 17.3%
Earnings Summary
In 30 Seconds- Adjusted revenue of $13.29 billion beat estimates by 3.4%, and EPS of $2.25 beat by 12.5%.
- Full-year EPS guidance rose to $8.00-8.10, but the midpoint is only 1.6% above expectations.
- The stock closed down 3.7% on a 14% drop in free cash flow and a weak implied fourth quarter.
The Numbers
Operating Profit Margin
22.5%
▲ 2.2 Points YoY · Prior Quarter 21.7%
Total Orders
$19.0B
▲ 49% YoY · Commercial Services ▲ 23%
Free Cash Flow
$2.04B
▼ 14% YoY · Nine Months ▲ 13%
Stock Reaction
−3.7%
Close to Close · $299.87
Quarterly Revenue ($ Billion)
11.31
Q3 25 · $11.3 B
11.87
Q4 25 · $11.9 B · QoQ + 5.0%
11.61
Q1 26 · $11.6 B · QoQ − 2.1%
12.63
Q2 26 · $12.6 B · QoQ + 8.8%
13.29
Q3 26 · $13.3 B · QoQ + 5.2% · YoY + 17.5%
12.8–13.3
Q4 26E · 12.8–13.3 · QoQ − 1.8% · YoY + 9.9%
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26
- Q4 26E
Q4 2026 Company Guidance
- Full-Year Adjusted EPS8.0 – 8.1 $8.0 $8.1 $
Midpoint 8.05 · Market Expectation 7.92 · Prior 7.65–7.851.6% Above Estimate ▲
- Full-Year Operating Profit10.9 – 11.0 billion10.9 billion11.0 billion
Prior Guidance 10.55–10.75Raised 2.8% ▲
- Full-Year Free Cash Flow9.1 – 9.4 billion9.1 billion9.4 billion
Prior Guidance 8.9–9.2Raised 2.2% ▲
- Full-Year Adjusted Revenue Growth19% – 20%19%20%
Prior Guidance High-TeensIn Line ✓
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±2.9% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Commercial Engines & Services$10.3 BShare 74.9%▲ 21.0% YoY
- Defense & Propulsion Technologies$3.47 BShare 25.1%▲ 7.0% YoY
Key Metrics
Total Orders
$19.0 B
▲ 49.0% YoYPress Release
Commercial Engine Orders
$15.3 B
▲ 58.0% YoYPress Release
Free Cash Flow
$2.04 B
▼ 14.0% YoYPress Release
Cash From Operations
$2.20 B
▼ 14.0% YoYPress Release
Commercial Engines Operating Margin
27.9%
Press Release
Shares are computed over the segment total: $13.8 B. The segment total differs from consolidated revenue ($13.3 B); the company's eliminations and other lines are not in this table. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“We delivered strong results this quarter as solid demand drove orders up 49%, with strength in commercial services up 23%, total revenue up 18% and EPS up 36%. We are raising our 2026 guidance across the board, and we now expect 2027 commercial services to grow low-double-digits supported by our over $170 billion commercial services backlog.”
- Services Backlog Over $170B
- Supplier Material Input Rising
- CPP Adds Castings Capacity
Summary and Review
Summary
GE Aerospace reported third-quarter adjusted revenue of $13.29 billion. That is up 18% year over year and 3.4% above the $12.85 billion market expectation. Adjusted earnings per share came in at $2.25. That is up 36% from a year ago, against an estimate of $2.00, a 12.5% beat. Operating profit margin widened 2.2 points to 22.5%. Orders rose 49% to $19.0 billion. The midpoint of the full-year profit target, however, sits only 1.6% above expectations.
The stock closed down 3.7% at $299.87, from a prior close of $311.28. The market read this report not as a growth story but as a cash story. Free cash flow fell 14% year over year to $2.04 billion. Sales allowances and reserves for engine durability also rose. According to Reuters, what bothered investors most was that the fourth quarter implied by the full-year target came in below expectations. The stock is down about 1% over the past year.
For the quarter, the score is 72 and the view is positive. The revenue and earnings gates are open, while the guidance gate is in line with expectations. Demand is not in question: commercial services orders rose 23%. Management expects commercial services revenue to grow at a low-double-digit rate in 2027. The caveat is cash and cost; if fuel prices stay high, airlines may cut flying. This is an assessment of the quarter, not a stock recommendation. The earnings day guide is a good place to start.
Full Review
Commercial engine services still drive the story.
The Commercial Engines & Services segment posted $10.34 billion in revenue for the quarter. That is up 21% year over year. The segment accounts for about 78% of adjusted revenue. Services revenue grew 17%, and internal shop visit revenue rose 12%. LEAP shop visit revenue climbed more than 40%, and spare parts revenue grew over 20%. Equipment moved faster: revenue rose 38% and engine deliveries increased 8%. LEAP deliveries, however, rose only 5%. Segment operating profit grew 21% to $2.89 billion. The margin of 27.9% was 0.1 point below 28.0% a year earlier. The company attributes this to mix and inflation. Orders rose 58% to $15.27 billion, with equipment orders more than tripling.
Margins widened, cash slipped.
Company-wide operating profit margin was 22.5%. It was 20.3% a year ago and 21.7% in the prior quarter, so it widened 2.2 points year over year and 0.8 point sequentially. GAAP profit margin, by contrast, narrowed 0.8 point to 19.9%. Part of the gap comes from a $210 million loss in the run-off insurance business. Cash was weaker. Cash from operating activities fell 14% to $2.20 billion. Free cash flow also fell 14% to $2.04 billion. In the prior quarter it was $3.03 billion. The nine-month total is $6.73 billion, up 13% year over year. So the decline belongs to this quarter, not the full year. News reports point to higher sales allowances and durability reserves as the drag on cash.
Guidance was raised on every line.
Full-year adjusted revenue growth guidance moved from high-teens to about 19-20%. The operating profit target rose from $10.55-10.75 billion to $10.9-11.0 billion. The midpoint is up 2.8%. Adjusted EPS guidance moved from $7.65-7.85 to $8.00-8.10; the midpoint is up 3.9%. Free cash flow guidance is now $9.1-9.4 billion. The problem lies in the implied fourth quarter. The target midpoint is $8.05, and nine-month earnings are $6.13. The remaining $1.92 is 22% above the $1.57 earned in last year's fourth quarter. The market, however, expected more. For 2027, management highlights low-double-digit commercial services growth and a services backlog of over $170 billion.
Defense grows slower but steadily.
Defense & Propulsion Technologies revenue rose 7% to $3.47 billion. Operating profit grew 8% to $475 million. The margin widened 0.2 point year over year to 13.7%. Orders rose 18% to $4.27 billion. The company kept its full-year segment outlook of low-double-digit growth and $1.6-1.7 billion in operating profit. During the quarter it signed a contract worth up to $2.9 billion to support F414 engines on the U.S. Navy's F/A-18 and EA-18G fleets. It also agreed to acquire Consolidated Precision Products to expand castings capacity. In October, it signed a deal with Turkish Airlines for more than 300 LEAP-1B engines and a long-term services agreement covering over 600 engines. These deals lock in equipment and services demand for years.
Next quarter, watch one line: cash.
Demand is not in dispute; the debate is about the quality of cash. To meet the full-year free cash flow target, the fourth quarter needs to generate $2.37-2.67 billion. That figure comes from subtracting the nine-month $6.73 billion from the guidance range. The average analyst price target is $391.19, about 30% above the current price. Cash is where that optimism will be tested. If fourth-quarter free cash flow tops $2.67 billion, this quarter's decline was a timing issue. If it falls below $2.37 billion, the reserves are a lasting cost and the margin story will be questioned again. The second gauge is commercial engine margin: a return above 28% would mean the mix effect was temporary.
Looking Ahead
Strengths and Risks
6 Strengths · 5 RisksStrengths
6- Adjusted revenue beat estimates by 3.4%, and adjusted EPS beat by 12.5%.
- Company-wide operating profit margin widened 2.2 points year over year to 22.5%.
- Total orders rose 49% and commercial engine orders 58%, with equipment orders more than tripling.
- Full-year earnings, operating profit and free cash flow targets were all raised.
- A commercial services backlog of over $170 billion gives visibility into 2027 growth.
- The Turkish Airlines deal for 300-plus LEAP-1B engines and fleet services locks in future demand.
Risks
5- Free cash flow fell 14% year over year to $2.04 billion.
- The fourth-quarter profit implied by the full-year target came in below market expectations.
- Commercial engine segment margin narrowed 0.1 point on mix and inflation.
- If fuel prices stay high, airlines may fly less and aftermarket demand could weaken.
- GE9X revenue recognition depends on certification, and the program remains a drag on profit.
What to Watch
4- Fourth-quarter and full-year 2026 results are expected in late January 2027.
- Per management on the call, GE9X midseal certification is targeted by year-end.
- The approval and closing process for the Consolidated Precision Products acquisition will be watched.
- The 2027 commercial services growth target will be firmed up with detailed guidance in January.
Upcoming Earnings
To Understand This