GE · Q2 2026 Earnings

Bullish

GE Aerospace

Reported July 16, 2026

30-second summary

30-second take: GE Aerospace put up $12.63B revenue (+24% YoY), $2.02 non-GAAP EPS (beating consensus of $1.86 by 8.6%), and $3.03B free cash flow — then raised every line of the FY26 guide it had just held four months ago. EPS goes to $7.65–7.85 (midpoint +$0.50 vs. prior $7.10–7.40, +6.9%), operating profit to $10.55–10.75B (+$0.50–0.70B, midpoint +$0.60B), and FCF to $8.9–9.2B (+$0.90B midpoint). The FY26 operating profit midpoint of $10.65B lands one year earlier than the Q4 call's already-pulled-forward $10B milestone — the 2028 investor day framework is now essentially collapsed into 2026, and the Middle East reserve management held back in Q1 has been released.

Headline numbers

EPS

Q2 FY2026

$2.02

+8.6% vs est.

Revenue

Q2 FY2026

$12.63B

+24.0% YoY

+6.6% vs est.

Free cash flow

Q2 FY2026

$3.03B

Operating margin

Q2 FY2026

21.7%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$12.63B	$11.00B	+14.9%	$11.61B	+8.8%
EPS	$2.02	$1.66	+21.7%	$1.86	+8.6%
Operating margin	21.7%	23.0%	-130bps	21.8%	-10bps
Free cash flow	$3.03B	$2.10B	+44.1%	$1.66B	+82.6%

Guidance

RTX raises full-year FY2026 EPS, operating profit, and FCF guidance on exceptionally strong Q2 performance (24% YoY revenue growth, 27% CES growth), with segment-level growth rates increased across the board.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	—	$12.634B	+6.6% above consensus	Beat
EPS (non-GAAP)	Q2 FY2026	—	$2.02	+8.6% above consensus	Beat
Free Cash Flow	Q2 FY2026	—	$3.027B	in-line	Met

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EPS (non-GAAP)	FY 2026	$7.10 - $7.40	$7.65 - $7.85	+$0.25–$0.45 (+3.4–6.4%)	Raised
Operating Profit	FY 2026	$9.85B - $10.25B	$10.55B - $10.75B	+$0.70–$0.90B (+6.8–9.1%)	Raised
Free Cash Flow	FY 2026	$8.0B - $8.4B	$8.9B - $9.2B	+$0.50–$0.80B (+6.0–10.0%)	Raised
Adjusted Revenue Growth	FY 2026	+21%	High-teens	Qualitative uplift; +21% actual outpaces 'high-teens' guidance range	Raised
CES Revenue Growth	FY 2026	mid-teens	low 20s	+5–10 percentage points	Raised
DPT Revenue Growth	FY 2026	mid- to high-single-digit	low double digits	+3–7 percentage points	Raised

Segment KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Commercial Engines & Services	$9.731B	—	+27.0%
Defense & Propulsion Technologies	$3.443B	—	+16.0%

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Total Orders	$16.5B	—	—
CES Services Revenue Growth	26%	—	—
Internal Shop Visit Revenue Growth	25%	—	—
Total Engine Deliveries Growth (H1)	31%	—	—
LEAP Engine Deliveries Growth (H1)	41%	—	—
CES Operating Margin	27.3%	—	—
DPT Operating Margin	13.8%	—	—
Free Cash Flow Conversion	>100%	—	—

Management tone

Transcript not available for this brief; the tone read below is drawn from the guidance action, the press-release language, and the delta versus Q1's explicit macro-reserve posture. It is deliberately narrower than a normal tone section.

Q2-2025 execution proven → Q3-2025 across-the-board raise → Q4-2025 $10B milestone pulled forward two years → Q1-2026 guide held with explicit Middle East reserve → Q2-2026 guide raised across the board, reserve released.

The Middle East reserve is gone. On the Q1 call, Morgan Stanley pulled out that GE would be raising guidance "if not for current events." The Q2 press-release language — "Given our exceptional year-to-date performance and visibility for the remainder of the year, we are raising our full-year guidance across the board" — is the direct sequel. Whether the geopolitical situation actually resolved or management simply concluded the embedded reserve was too conservative doesn't matter to the P&L: the reserve has been converted to guidance.

The operating profit framework is now one year ahead of the pull-forward, which was two years ahead of the original. The 2024 investor day put $10B of operating profit in 2028. The Q4-2025 call pulled it to 2026. The Q2-2026 raise puts the FY26 midpoint at $10.65B — the $10B milestone is no longer a milestone at all, it's the floor of the current-year range. The 2028 investor day target of $11.5B is now within reach of the current-year guide's high end plus one additional year of growth. Management has to be preparing a raised 2028 framework, likely for the Q4-2026 call.

Segment-level detail is unusually explicit for a mid-year raise. Q1 held the segment guides flat despite the beat; Q2 raised every segment guide: CES revenue to ~20% (from mid-teens), CES services to low 20s (from mid-teens), CES operating profit to $10.25–10.35B (from $9.6–9.9B), DPT revenue to low double-digits (from mid- to high-single-digit), DPT operating profit to $1.6–1.7B (from $1.55–1.65B). Volunteering that level of forward segment granularity mid-year — rather than saving it for the Q4 initial-guide framework — signals confidence that H2 is locked in enough to publish rather than reserve.

The revenue growth downshift from LDD to "high-teens" is the one interpretive gap. Against +24% H1 growth, "high-teens" for the full year requires H2 revenue growth to decelerate to roughly low-teens — mechanically consistent with tougher comps and a mix shift toward equipment, but visually a step down from the Q1 framing. This is the sole item that reads as management preserving optionality against a Q3 or Q4 print, rather than releasing it. Given the operating profit raise and the FCF raise, the read is conservative rather than concerning.

Answers to last quarter's watch list

Q2 services growth print vs. the "high-teens above FY guide" cadence — CES services printed +26% in Q2, well above the high-teens management telegraphed on the Q1 call. Internal shop visit revenue growth was +25% in H1. The print is above the +20% threshold that would "intensify pressure to raise the EPS guide" — and management delivered that raise. Status: Resolved positively

Middle East conflict resolution and any associated guide revision — Guide was raised outright across every metric, matching the "outright guide raise on the Q3 call" scenario one quarter earlier than expected. The reserve Morgan Stanley pulled out is visibly released. Status: Resolved positively

9X unit shipments and dollar loss disclosure — Not disclosed in the press release. No per-unit economics, no shipment count, no update against the "50% cost reduction by 2028" milestone. Continued silence on the disclosed loss trajectory ($200M → ~$400M in FY26) is itself a negative-leaning signal, though the raised operating profit guide implies the losses are inside the envelope. Status: Continue monitoring

CES margin sequential trajectory — CES Q2 margin printed 27.3%, above Q1's 26.4% and comfortably above the 23% "would suggest equipment mix arriving faster than modeled" threshold. Sequential expansion despite +41% H1 LEAP deliveries is genuinely better than the Q1 setup implied, though YoY the margin contracted 160 bps on install engine growth including GE9X. Status: Resolved positively

FCF conversion path to FY $8.0–8.4B — Q2 conversion >100% held; H1 FCF of $4.69B tracks the raised $8.9–9.2B FY guide comfortably. Above the 90% Q2 threshold that would have signaled inventory-build strain. Status: Resolved positively

Spare parts delinquency direction — Not disclosed as a discrete metric in the press release. The Q1 framing (up ~70% since end of 2024) got no update, though services printing +26% suggests conversion is at least keeping pace with intake. Status: Continue monitoring

What to watch into next quarter

Q3 revenue print against the implied H2 deceleration in the "high-teens" FY guide. H1 grew +26%; "high-teens" FY implies H2 low-teens. If Q3 prints above +18%, the "high-teens" language is confirmed as reserve rather than genuine H2 caution — and the Q4 setup becomes another raise.

First 2027 framework language on the Q3 call. With the $10B milestone now the FY26 floor rather than a milestone, management needs to reset the medium-term profit trajectory. Watch for any commentary on 2027 CES margin direction or 9X loss decline — the 2028 $11.5B target is now less than a full year of growth away from the FY26 high-end.

9X per-unit cost disclosure. Two consecutive quarters of silence on the unit economics against a doubled loss trajectory ($200M → $400M in FY26) makes Q3 the third opportunity. Any dollar-per-unit or "unit N vs. unit N-50" disclosure would be material; continued silence flags this as the one segment where the framework isn't being validated by disclosure.

CES margin holding above 26% in Q3. With margin expanding sequentially in Q2 despite equipment mix, the "flat FY26 CES margin" framing looks conservative. A Q3 print above 26% would raise pressure for another CES operating profit guide raise on the Q4 call.

DPT margin sustainability at 13%+. Two consecutive quarters above 13% (Q1 11.8%, Q2 13.8%) after Q4-2025's 8.9% trough. Watch whether the FlightDeck-driven margin expansion sticks in Q3 or whether the segment reverts — the raised DPT operating profit guide of $1.6–1.7B requires margin to hold to hit the implied trajectory.

Backlog composition and 2027 book-to-bill. Backlog to $210B+ from $190B at year-end is $20B of net additions in H1 against ~$26B of revenue, implying book-to-bill just below 1 on the trailing measure but well above 1 on orders ($16.5B + $23.0B = $39.5B in H1). Q3 order print above $15B would sustain the ramp thesis into 2027.

Sources

GE Aerospace Q2 2026 earnings release, filed via SEC EDGAR — https://www.sec.gov/Archives/edgar/data/40545/000004054526000047/ge2q2026earningsrelease.htm

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