GE Aerospace reported first-quarter 2026 earnings that significantly beat analyst expectations, yet its stock price fell sharply as investors focused on a revised, more cautious outlook driven by rising fuel costs and geopolitical tensions.
The company posted adjusted earnings per share (EPS) of $1.86, well ahead of the $1.60 consensus estimate. Revenue reached $11.6 billion, a 29% year-over-year increase and above the estimated $10.7 billion. Total orders were a standout, surging 87% to $23 billion. This was driven by a 93% jump in commercial orders to $17.3 billion and a 67% rise in defense orders to $6.2 billion.
Despite these strong results, GE's stock reversed early premarket gains of about 2.4% and closed the day down roughly 3.5% to $293. The sell-off was attributed to management's updated guidance, which reflected a changed macroeconomic backdrop.
The company cited elevated benchmark oil prices, which are approximately $10 per barrel higher for 2028 following the outbreak of conflict with Iran, leading to increased jet fuel costs and expected near-term tightness in fuel availability. GE's guidance now assumes Brent crude remains elevated through Q3 2026 before easing by year-end.
Perhaps more telling, GE revised its 2026 global flight departure growth estimate down to flat-to-low-single digits from a prior forecast of mid-single digits. Departures in the Middle East are now expected to decline in the low double digits. This is significant as flight departures drive engine wear, which in turn fuels GE's highly profitable services business. However, the company expects limited immediate impact on 2026 services revenue, as most maintenance workload is locked in under long-term contracts.
CEO Larry Culp stated the company is "trending toward the high end" of its full-year adjusted EPS guidance range of $7.10 to $7.40, noting a "strong start to the year." Wall Street's consensus estimate for the full year is $7.46. The company maintained its full-year guidance, including operating profit of $9.85 billion to $10.25 billion and low double-digit revenue growth for 2026.
Analyst commentary suggested near-term risks are contained. RBC analyst Ken Herbert noted the near-term impact of Middle East travel disruptions on GE's commercial services business is likely "limited" or "modest." Structural tailwinds remain, including multi-year backlogs at Boeing and Airbus and persistent production constraints that keep older aircraft in service longer, supporting GE's maintenance demand.
