GE Aerospace Q2 2026 Earnings Call Transcript

GE Aerospace (NYSE: GE ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

The full earnings call is available at Summary GE Aerospace reported strong financial performance in Q2 2026, with orders up 17%, revenue increased by 24%, operating profit up 18%, and EPS growth of 22%. Free cash flow grew by 43%. The company raised its full-year guidance for 2026, expecting high-teens revenue growth and increased operating profit and free cash flow, driven by strong demand and backlog. Strategic initiatives include expanding capacity to meet Leap engine demand, advancing next-gen technologies, and leveraging AI for operational improvements.

Operational highlights include a significant reduction in production lead time and shop visit turnaround times, supported by the Flight Deck initiative. Management emphasized the resilience of demand despite a dynamic environment and highlighted investments in technology and customer-driven improvements. Full Transcript OPERATOR Good day, ladies and gentlemen, and welcome to the GE Aerospace second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode.

My name is Liz and I will be your conference coordinator today. If you experience issues with the webcast slides refreshing or there appears to be delays in the slide advancement, please hit F5 on your keyboard to refresh. As a reminder, this conference is being recorded. I'd now like to turn the program over to your host for today's conference, Blair Shore from the GE Aerospace Investor Relations Team.

Please proceed. Blair Shore, GE Aerospace Investor Relations Thanks, Liz. Welcome to GE Aerospace's second quarter 2026 earnings call. I'm joined by Chairman and CEO Larry Culp and CFO Rahul Guy.

Many of the statements we're making are forward-looking and based on our best view of the world and our businesses as we see them today. As described in our SEC filings and website, those elements may change as the world changes. Additionally, Larry and Rahul will speak to total company and corporate financial results and guidance today on a non-GAAP basis. Larry Culp, Chairman & CEO, GE Aerospace Blair, thank you and good morning everyone.

The GE Aerospace team continues to execute with discipline and focus with our customers at the center of everything we do. Our 57,000 employees remain committed to our purpose, inventing the future of flight, lifting people up and bringing them home safely. I'd like to open by saying CFM International is supporting our customer Ryanair and assisting with the investigation into Flight 1879. Safety is our top priority at all times and our thoughts are with the passengers, pilots, and crew who were on board.

The second quarter marked another quarter of significant growth driven by robust commercial services. Overall, orders were up 17% with both segments up at least low double digits. Revenue increased 24% with CES up 27% and DPT up 16%. Operating profit grew 18% with both segments up at least high teens and EPS increased 22% and free cash flow grew 43% with conversion over 140%.

These results close out an exceptional first half with orders up 49%, revenue up 27%, EPS growing 24% and free cash flow increasing 31% with 115% conversion. Flight Deck is helping us drive the operational improvements which undergird the significant output increases with the first half, Commercial Services revenue up 32% and total engine deliveries up 31%. We remain focused on advancing what matters most to our customers, delivering on robust demand and our backlog of over $210 billion while investing in both current and next-gen technologies to improve time on wing and cost of ownership.

Given the strength of our first half results and momentum for the remainder of the year, this morning we're raising our 2026 guidance across the board. I'd like to thank the entire GE Aerospace team and our supplier partners for working so well together to deliver for our customers. Turning to Slide four, Flight Deck continues to strengthen our operational capabilities in safety, quality, delivery, and cost, always in that order.

With demand increasing for the F110 engine at our site in Lynn, Massachusetts, we used Flight Deck to reduce overall production lead time for a critical component by roughly 60% through the consolidation of key process steps and reducing operator distance traveled. This supported F110 deliveries growing over 50% year over year in the second quarter. In May, I was in Brazil with the team at Selma, our largest MRO site, where I saw firsthand how we used Flight Deck to reduce CFM56 final assembly lead time by nearly 50%.

Actions like this have improved total shop visit turnaround times by about a week since the end of 2025, and just last week we held three Kaizens with GKN, a top supplier of fan cases and other key components to break constraints tied to rate performance. We worked collaboratively together to create detailed visual work instructions, increased capacity, and implemented a 3D inspection technology which led to a 90% improvement in inspection time. Work is now underway to sustain these results and build further momentum. At the same time, AI is a force multiplier for Flight Deck across our turbine airfoils team.

For example, we recently ran several Kaizens to improve the demand signal process. Standardizing and reducing demand signals strengthens supplier confidence. By using AI to automate the process, we cut the number of demand signals in half and reduced processing time by nearly 90% across 190 parts. Reducing the number of demand signals we send our suppliers helps focus their efforts, leading to priority supplier material input, increasing double digits sequentially and year over year again in the second quar