GE Aerospace

GE Aerospace reported Q3 2026 revenue growth of 18%, with CES revenue up 21% and DPT revenue up 7%. Operating profit was $3 billion, up 30%, operating margin expanded 220 basis points to 22.5%, and EPS was $2.25, up 36%. Free cash flow exceeded $2 billion in the quarter, and year-to-date free cash flow was $6.7 billion, up 13%, with year-to-date revenue up 23%, orders up 49%, and EPS up 28%. For 2026, management raised guidance to revenue growth of 19%-20%, operating profit of $10.9 billion-$11 billion, EPS of $8-$8.10, and free cash flow of $9.1 billion-$9.4 billion. CES is now expected to grow in the low 20s, DPT growth is expected to be low double digits, and the company now expects low double-digit commercial services growth in 2027.

Larry Culp emphasized that GE Aerospace is executing well in a dynamic environment and that the business is being supported by its scale, installed base, and Flight Deck operating discipline. He highlighted strong customer demand, major engine commitments at Farnborough, and operational progress such as better output, shorter turnaround times, and LEAP-related grounded aircraft falling to nearly zero since the summer. His tone was confident and upbeat, while still acknowledging supply chain constraints and broader airline fuel-pressure headwinds.

Rahul Ghai said the quarter showed double-digit growth across orders, revenue, profit, and EPS, with CES acting as the main driver. He cited $3 billion of operating profit, a 22.5% margin, $2.25 EPS, and $2 billion of free cash flow, and explained that margin strength came from services volume, productivity, and price, partly offset by inflation. He also noted year-to-date free cash flow of $6.7 billion and 105% conversion, then raised full-year guidance for revenue, operating profit, EPS, and free cash flow. On 2027, he said services growth should be low double digits, DPT should be high single digits, and margins should hold roughly in line with 2026 despite the 9X headwind.

Analysts focused on whether high fuel prices and airline profitability could pressure services demand, but management said airlines are still prioritizing fleet readiness and time on wing. They also addressed strong service orders versus delinquency, with Rahul saying spare parts demand remains strong and backlog is high, while Larry said the company wants delinquency to come down even if backlog stays elevated. Other questions covered widebody shop visits, GE9X timing, GEnx production, CFM56 retirement rates, and the 2027 growth bridge; management said widebody demand and work scopes remain strong, CFM56 retirements are running below prior assumptions, and 2027 growth is being underwritten mainly by backlog and flown cycles already in the system.