GE Aerospace raises 2026 outlook on strong engine demand despite higher jet fuel prices
Why It MattersSpare-parts and maintenance demand is keeping engine makers' aftermarket revenue growing even as higher jet fuel prices pressure airlines' flying plans.
General Electric Co, which does business as GE Aerospace, raised its full-year outlook when it reported third-quarter earnings on Tuesday (Oct 20), citing strong aircraft engine demand. Adjusted earnings are now expected at US$8 to US$8.10 a share this year, up from a prior range of US$7.65 to US$7.85. The company also raised its forecasts for free cash flow, operating profit and adjusted revenue growth for the year.
GE said it expects 2027 commercial services to grow at "low-double-digits," compared with this year's forecast of revenue growth "of low 20s" at its Commercial Engines & Services business. Year-to-date commercial services revenue increased 26%, and total engine deliveries grew 21%. GE has now raised its guidance eight times since January 2024. GE's shares fell early Tuesday, suggesting the guidance increase disappointed some investors expecting a more bullish update. The new outlook implies fourth-quarter profit will fall short of Wall Street estimates, a forecast TD Cowen analyst Gautam Khanna said in a note was "likely conservative."
The world's largest maker of jet engines continues to benefit from robust demand for spare parts and maintenance services that airlines need to keep their planes flying. Carriers trimmed flying plans after the US and Israel began strikes on Iran in February, and jet fuel prices recently rose again after moderating over the summer. Several large US airlines are due to report quarterly earnings this week.
In September, GE agreed to buy Consolidated Precision Products for nearly US$12 billion, adding highly engineered castings crucial to aerospace and defense products and giving it more control over its supply chain. GE also signed a memorandum of understanding with Indian carrier IndiGo for more than 1,000 LEAP-1A engines to power 510 Airbus A320neo-family jets, the largest single order for engines made by CFM International, GE's joint venture with Safran SA. Philippine Airlines will use GEnx-1B engines on 15 Boeing 787-10 aircraft, and AerCap Holdings NV selected GEnx-1B engines for 15 Boeing 787 Dreamliners.
