News about GE Aerospace

GE Aerospace (GE) raised its full-year outlook after third-quarter orders rose 49%, led by a 58% gain at its Commercial Engines & Services (CES) segment, and reported a total backlog above $170 billion. Revenue grew 18% and operating profit climbed 30% to $3 billion, while EPS rose 36% to $2.25. Free cash flow reached $2 billion in the quarter and $6.7 billion for the first nine months, up 13%. The company raised its 2026 revenue-growth outlook to 19% to 20% from its prior forecast and now expects low-double-digit commercial services growth in 2027. Management credited the FLIGHT DECK operating system with higher output and improved turnaround times.

GE Aerospace shares slipped 2.1% by 11 a.m. ET Tuesday despite beating third-quarter estimates, with earnings of $2.25 per share versus a $2 forecast and sales near $13.3 billion versus $12.85 billion expected. GAAP revenue rose 16% to $14.1 billion, driven mainly by engine sales to commercial carriers, with commercial sales up 21% and defense up 7%. Profit margin fell 80 basis points to 19.9% and free cash flow declined to $2 billion, but total orders rose 49% to $19 billion. Management raised its full-year outlook to revenue growth of at least 19%, operating profit of perhaps $11 billion, adjusted EPS of about $8.05, and free cash flow of at least $9.1 billion. The author argues that the stock's price of more than 36x free cash flow, against an 18% growth rate, sits at the upper edge of a fair price, which could explain the decline after the beat.

GE Aerospace reported third-quarter 2026 adjusted EPS of $2.25 versus $1.99 expected and revenue of $14.12 billion versus $12.84 billion, and raised its 2026 adjusted EPS guidance to $8 to $8.10. Even so, the stock fell 4% to $299.59 in the morning session as costs climbed: sales discounts and allowances rose sharply on new engine installations, spare parts and durability reserves, free cash flow fell 9.2% to $2.04 billion, and operating income barely moved at $2.81 billion. Recognition of deferred revenue on the GE9X engine awaits midseal certification. Management pointed to orders up 49% to $19 billion and an over $170 billion commercial services backlog. RTX rose 0.52% to $193.15 and Boeing fell 0.49% to $190.57, and the article argues the selloff is specific to GE Aerospace given the nearly flat broader market.