GE Aerospace Beats on Q2, Raises Full-Year Guidance on Strong Aftermarket Demand

Transcript intelligence

What changed

EPS of $2.02 beat consensus of $1.86 by 8.6%, while revenue of $12.63B exceeded estimates of $11.88B by 6.3%. Orders grew 17% and operating profit rose 18% YoY. Management raised full-year guidance: CES revenue growth to approximately 20%, DPT to low-double-digits, and EPS to $7.65 to $7.85. The stock fell 3.5% on an abnormal basis despite the beat, with volume 39% above baseline, before drifting 4.6% higher in subsequent sessions. The pullback appears driven by concerns over rising spare-parts delinquency (up 20% sequentially) and supply-chain capacity limits rather than fundamental deterioration. Notably, this quarter's guidance raise marks a shift from Q1, when guidance was merely maintained amid geopolitical uncertainty.

Guidance delta

Full-year guidance was raised across the board, a notable upgrade from the prior quarter when guidance was maintained. CES revenue growth is now expected at approximately 20%, DPT growth at low-double-digits, and full-year EPS guidance set at $7.65 to $7.85. Capex outlook remains increasing, with continued investments in MRO capacity expansion at Celma and the new MTU Fort Worth facility, LEAP durability kit industrialization for early 2027, and hybrid-electric EPFD demonstrator development. The raise signals management's growing confidence in aftermarket demand resilience and LEAP engine momentum despite lingering macro uncertainty.

Key takeaways

• EPS of $2.02 beat estimates by 8.6% and revenue of $12.63B beat by 6.3%, with orders up 17% and operating profit up 18% YoY.
• Full-year guidance raised: CES growth approximately 20%, DPT low-double-digits, EPS $7.65 to $7.85.
• LEAP-1B durability kit certification expected to double time on wing, supporting long-term services economics.
• FLIGHT DECK automation cut lead times up to 60% and improved inspection efficiency by 90%.
• Spare-parts delinquency rose 20% sequentially, remaining a near-term operational challenge.
• Stock fell 3.5% on an abnormal basis post-earnings before recovering 4.6% in subsequent sessions.

Management priorities

• Scale MRO capacity at Celma and the new MTU maintenance facility in Fort Worth.
• Industrialize LEAP durability kit rollout for early 2027 production.
• Continue hybrid-electric EPFD demonstrator development toward FAA certification.
• Deploy FLIGHT DECK tools to further reduce lead times and improve quality.
• Grow external LEAP service channel to 30% of total LEAP services by 2030.