GE Aerospace raises 2026 EPS outlook to $8.00–8.10
Key Facts
GE Aerospace raised its 2026 adjusted earnings per share forecast to a range of $8.00 to $8.10 as it reported third-quarter results on October 20, supported by growth in its services business. The new range replaces its previous forecast of $7.65–7.85 per share, according to the company's earnings release filed with the U.S. Securities and Exchange Commission. The increase came after third-quarter adjusted earnings per share reached $2.25, beating Wall Street estimates of $2.01, according to Reuters. Adjusted earnings per share thus grew 36% year on year, according to the company's quarterly performance figures. Alongside the revised earnings outlook, the company announced a full-year free cash flow target of $9.1 billion to $9.4 billion, despite a third-quarter decline from the same period a year earlier.
GE Aerospace's third-quarter revenue totaled $14.1 billion under generally accepted accounting principles, according to the company's earnings release. Revenue rose 16% from the same quarter a year earlier, while adjusted operating profit increased to $3.0 billion. That profit measure, which the company reports on an adjusted basis, grew 30% year on year during the period, outpacing revenue growth. In the Commercial Engines & Services segment, services revenue grew 17% from a year earlier, according to the filing with the U.S. regulator. The company attributed the segment's profit growth to "higher services volume and improved pricing," identifying the two drivers that supported the business during the quarter.
On liquidity, third-quarter free cash flow totaled $2.0 billion, down 14% year on year, according to GE Aerospace's reported results. That followed a second quarter in which the company recorded free cash flow of $3.0 billion, according to its earnings release for that period. Second-quarter free cash flow had risen 43% from the same period a year earlier, before the decline recorded in the third quarter. In premarket trading on October 20, the company's shares fell about 1.6%, according to a Reuters update published on the morning of the earnings announcement. The market move followed the announcement of adjusted earnings per share above Wall Street expectations and an increase in the full-year earnings range, alongside a decline in quarterly free cash flow.
Underpinning its services performance, GE Aerospace's commercial services backlog exceeds $170 billion, according to Reuters' coverage of the company's results. To expand production capacity, the company agreed in September to buy CPP for about $11.75 billion. GE Aerospace said in its announcement of the agreement that it would fund the deal with $7 billion in cash, with the remainder financed through new debt. The acquisition aims to increase casting production capacity, according to the company, which described the purpose of the deal as "investing in casting production capacity." The demand the company seeks to meet through this expansion spans commercial engines, aftermarket services and defense.
The company's outlook for its commercial services business extends to 2027, when it expects continued revenue growth, according to Reuters. The company projected growth in the low double digits in the outlook presented alongside its third-quarter results. GE Aerospace expects to complete the CPP deal in the second half of 2027, according to the acquisition agreement announcement. The expected closing date remains subject to regulatory approvals and customary closing conditions set out in the company's announcement. Under the announced agreement, the addition of casting production capacity depends on completion of the acquisition, which aims to meet demand in commercial engines, aftermarket services and defense.
Ahead of next year's outlook, GE Aerospace's 2026 targets include adjusted earnings per share of $8.00 to $8.10, according to the update filed with the U.S. regulator. That target follows a third quarter in which adjusted earnings per share grew 36% from a year earlier, according to the earnings release. For cash flow, the company is targeting a full-year range of $9.1 billion to $9.4 billion, compared with $2.0 billion in the reported quarter. Commercial services remain part of its announced 2027 outlook, with revenue growth targeted at the pace Reuters reported in its earnings coverage. In the second half of 2027, the company expects to complete the CPP acquisition, subject to regulatory approvals and customary closing conditions.