GE Aerospace Q4 Earnings Beat Estimates, Lift 2026 Outlook

GE Aerospace reported stronger-than-expected fourth-quarter earnings on Jan. 22, 2026, prompting management to raise profit and free cash flow guidance for 2026. The company cited robust aftermarket demand and a surge in orders as key drivers sustaining momentum into the new year.

Quarter Results and Cash Flow

GE Aerospace posted adjusted fourth-quarter earnings per share (EPS) of $1.57, beating the $1.43 consensus by nearly 10%. Revenue reached $11.9 billion, up 20% year over year and above the $11.2 billion expected. For the full year, revenue rose 21% to $42.9 billion, while operating profit increased 25% to $9.1 billion, lifting operating margins by 70 basis points to 21.4%.

The company generated $7.7 billion in free cash flow for 2025, a 24% increase with conversion exceeding 110%. Management described the quarter as a strong finish to the year, highlighting substantial improvement across key metrics.

Commercial Engines & Services (CES) revenue grew 24%, with services up 26%. CES profit rose 26% to $8.9 billion, and margins expanded 40 basis points to 26.6%. Defense & Propulsion Technologies (DPT) revenue increased 11%, profit climbed 22% to $1.3 billion, and margins improved 110 basis points to 12.3%.

Orders, Backlog, and Demand

Fourth-quarter orders surged 74% year over year, driven by a 76% increase in CES bookings and a 61% rise in DPT. This strong intake boosted year-end bookings significantly.

For 2025, orders grew 32%, with CES up 35% and DPT up 19%. Defense book-to-bill stood at about 1.5, and backlog totaled $21 billion. Among new contracts, GE secured an order from Hindustan Aeronautics for 113 F404 engines.

Engine deliveries rose 26% for the year, with commercial shipments up 25%, including a 28% increase in LEAP engine deliveries to over 1,800 units. Defense deliveries grew 30%, supporting higher services throughput.

Guidance and Aftermarket Developments

Management set 2026 targets calling for low double-digit revenue growth, operating profit between $9.9 billion and $10.3 billion, adjusted EPS of $7.10 to $7.40, and free cash flow of $8 billion to $8.4 billion. CES profit is expected around $9.6 billion to $9.9 billion, and DPT profit about $1.6 billion to $1.7 billion. The outlook assumes continued strong demand, services growth and pricing to offset original-equipment expansion, ongoing investments, and a lower spare-engine ratio.

GE Aerospace’s joint venture CFM International renewed its International Air Transport Association (IATA) aftermarket competition agreement through February 2033. The extension preserves third-party maintenance, repair, and overhaul (MRO) access to CFM56 and LEAP engine technical data, manuals, and a root-cause warranty process. The company framed this renewal as a commitment to maintaining a competitive and open aftermarket for CFM products.