Report date: Thursday, July 16, 2026, before market open | Call: 2026Q2 Earnings Call
| Stock price (7/15/26 close) | ~$360 (down from a ~$378 early-July high) |
| YTD/12-month move | Round-tripped from ~$275 (late March low) to ~$378 (early July) |
| Street Q2 estimates | Revenue ~$11.8B (+16.3% y/y); operating margin ~22%; EPS ~$1.86 |
| Analyst sentiment | Very bullish; ~85% Buy ratings; average PT ~$352; Street-high PT $431 (Citi) |
| FY26 guide (maintained, "trending high end") | Adj. revenue +low-double-digits; Op. profit $9.85–10.25B; Adj. EPS $7.10–7.40; FCF $8.0–8.4B |
GE Aerospace's first quarter was unambiguously strong: orders of $23.0B (+87%), adjusted revenue of $11.6B (+29%), operating profit of $2.5B (+18%), adjusted EPS of $1.86 (+25%), and free cash flow of $1.7B (+14%). Commercial Engines & Services (CES) orders nearly doubled and Defense & Propulsion Technologies (DPT) orders were up 67%, including a record defense order quarter for the decade. Management was explicit that results beat internal expectations by roughly $300M, and both Culp and CFO Rahul Ghai said on the Q1 call that "if it were not for current events... we'd be talking about an increase in the guide," rather than just leaning toward the high end. That sets a high bar of credibility (and expectation) heading into Q2.
Management guided for Q2 services growth of "high teens," above the full-year growth rate, with sequential and year-over-year profit growth for the total company, underpinned by unusually strong visibility: 95%+ of Q2 spare parts revenue and all Q2 shop visits already booked/off-wing at the time of the Q1 call. That visibility is exactly why the Street's ~$11.8B revenue / ~$1.86 EPS consensus for Q2 looks achievable-to-beatable on paper — the swing factor is less about Q2 execution and more about what management now says about the back half.
This is the most important incremental datapoint since Q1 earnings. On the April call, GE already cut its full-year departures assumption from mid-single-digit growth to flat/low-single-digit growth because of the Middle East conflict (which represents ~5% of departures but a source of elevated oil prices), and it built FY26 guidance around Brent staying elevated through Q3 before easing by year-end, with no assumption of global recession.
In the last 24–48 hours, the situation has worsened rather than improved: the U.S. struck Iranian coastal defenses and missile sites, a naval blockade of Iranian ports was reimposed, and Iran has threatened to shut regional energy exports and use Houthi allies to close the Bab el-Mandeb strait — with Brent up for a fourth straight day (~$85/bbl) and Goldman Sachs flagging Brent could exceed $110 in Q4 if the Gulf export disruption persists, versus a fall into the $60s if tensions ease. GE's stock has already pulled back from ~$378 to ~$353–360 over the past week, tracking this news.
This puts a very specific question in front of management tomorrow: does the guidance assumption set from April (elevated fuel through Q3, easing by year-end, no recession) still hold, or does the recent escalation push GE toward the low end of its own scenario range — or even require a formal guidance trim? Given how much credibility management built in Q1 (strong beat, "would have raised" language, high-end trending), any softening of tone here would be a notable swing factor for the stock, arguably more important than the Q2 print itself.
Commercial Engines & Services (CES) — the core swing factor. - Backlog: >$170B in commercial services backlog, up ~$30B since year-end 2024, with commercial services orders up over 30% over the trailing 12 months. This backlog is the reason management remains confident about 2026 even amid macro noise. - Spare parts delinquency (shipments delayed due to material constraints) is up roughly 70% since the end of 2025 — a persistent supply/demand imbalance that is, perversely, bullish for visibility (95%+ of Q2 spare parts already in backlog) but a reminder that GE still can't fully keep pace with demand. - Fleet dynamics matter for the bear case: about two-thirds of the CFM56 fleet has not yet had a second shop visit, and ~70% of GE90s haven't had a second shop visit either — a young, growing fleet that management argues insulates 2026 aftermarket revenue even if departures soften, with any hit likely to show up as a "push-out," not "destruction," of demand (drawing on the post-GFC and post-pandemic analogy). - LEAP margins: services margins on LEAP are inflecting positively (management expects further improvement in 2026 after the program was "breakeven 2 years ago"), aided by more in-house repairs (expected to double in 2026 vs. 2025) and growth of the third-party MRO channel (~15% of LEAP shop visits now vs. ~10% eighteen months ago). Watch for an update on this trajectory, with management's target being LEAP margins approaching overall CES service-margin levels by ~2028. - GE9X/Boeing 777X: a mid-seal durability issue was flagged in January; management said there's no change to the certification schedule or expected program losses, though 777X engine deliveries will be more second-half weighted in 2026. Any update here (or from Boeing) is worth watching.
Defense & Propulsion Technologies (DPT) — the quieter, high-conviction grower. - Q1 orders were up 67% with a defense book-to-bill above 2x for a second straight quarter; revenue grew 19% and profit grew 17%, with margins guided to full-year operating profit of $1.55–1.65B and DPT trending to the higher end of guidance. - Defense demand tailwinds remain strong industry-wide — U.S. political pressure to accelerate weapons production and expand domestic manufacturing capacity has been a live theme this week across the defense sector, a backdrop that should support DPT order commentary. - Watch for Farnborough Airshow (occurring in July) order flow commentary, plus any updates on GEK1500/GEK800 small-engine and CCA programs (Kratos, Shield AI/X-BAT partnerships) and the Aeroderivatives repricing story (moved from CES to DPT in Q1; management flagged a multi-quarter transition from legacy pre-spin backlog pricing to improved post-spin pricing, sold out through 2030).
Given the magnitude of the geopolitical news flow in just the last 48 hours, this quarter's print itself may matter less than management's tone on the back half — GE built a lot of credibility with its Q1 "we'd have raised the guide" framing, and tomorrow's call is the first real test of whether that confidence survives a fresh oil/Middle East shock.