GE Aerospace Reports Strong Earnings Again. What Will it Take to Lift the Stock?

Dow Jones
2 hours ago

GE Aerospace topped Wall Street's earnings estimates. It wasn't enough to boost shares early Tuesday.

The company reported third-quarter earnings per share of $2.25 from sales of $13.3 billion. Wall Street was looking for earnings per share of $2.01 on sales of $12.9 billion.

Orders were $19 billion, up 49% year over year and far exceeding sales.

GE Aerospace shares were down 0.6% in early trading, shortly after results were released.

This is breaking news. Read a preview of GE's earnings below and check back for more analysis soon.

The stock market cycles between fear and greed. Aerospace stocks are in the fear portion of the cycle, with investors looking past strong results to fret over a potential slowdown in aftermarket growth in 2027.

GE Aerospace has a chance to counter that narrative on Tuesday.

That's when the jet engine maker reports third-quarter results. Wall Street is looking for earnings per share of $2.01 on sales of $12.9 billion. A year ago, GE reported adjusted earnings per share of $1.66 on adjusted sales of $11.3 billion.

Earnings growth has been impressive. It hasn't mattered. The stock has fallen following each of the past three quarterly reports. Shares dropped 4.1% after second-quarter results, 5.6% after first-quarter results, and 7.4% after fourth-quarter 2025 results.

GE Aerospace beat Wall Street estimates each time, by an average of 11%. Earnings per share grew an average of 22%.

The company has also raised its guidance. In July, management said it expected full-year sales to rise by a high-teens percentage, up from prior guidance for 10% to 12% growth. Earnings per share were expected to be between $7.65 and $7.85, up from a prior range of $7.10 to $7.40.

Still, coming into the week, GE stock was up just 2% year to date. High oil prices, which raise the cost of air travel, have been a factor. The bigger issue is probably the commercial aftermarket.

Aerospace companies make most of their profits on parts and services, choosing to sell original equipment closer to cost. With Boeing and Airbus trying to ramp up plane production, aerospace suppliers have more low-margin business to do. What's more, the need for new parts could pull supply away from the aftermarket amid supply-chain constraints.

Growth in the commercial aftermarket could slow in 2027. The fear might be overblown, though.

"We believe GE Aero and Safran will continue to strike a positive tone on 2027 services growth, and the aftermarket concerns from earlier in the year have not yet materialized," RBC analyst Ken Herbert wrote in a preview report. "Recent data from our 3Q26 Maintenance, Repair, and Overhaul survey was relatively strong, and industry fundamentals (retirements, cycles, passenger levels) remain in line or better than expectations."

Herbert's views are echoed elsewhere on the Street. "More often than not, our survey results suggest that underlying trends are robust enough to question the steepness of the aftermarket deceleration in consensus [financial] models when looking into early 2027," wrote Citi analyst John Godyn in a recent report. "Accordingly, we expect aftermarket-exposed companies during earnings season to speak to stronger first-half 2027 growth rates than consensus models despite tough comps."

Those surveys suggest conditions are better than feared. It remains to be seen if investors will buy that narrative.

GE Aerospace stock fell 0.8% to $311.34 on Monday, while the S&P 500 rose 0.4% and the Dow Jones Industrial Average slipped 0.1%.

Coming into the week, shares traded at about 35 times expected earnings over the coming 12 months, down from 45 times a year ago. That valuation decline came despite improving earnings expectations. Wall Street projects 2027 earnings per share of $9.13. A year ago, that estimate was $8.30.

 

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