Shares of GE Aerospace tumbled in early trading Thursday despite the company delivering a standout second quarter that topped analyst forecasts across the board. The stock slid roughly 2% to $352.80 shortly after results, extending a pre-market drop of over 4%, as investors appeared to lock in profits following a strong run-up that had pushed the stock to multi-year highs.
Second-quarter financials exceeded expectations: GAAP revenue jumped 21% year-over-year to $13.35 billion, well ahead of the $11.91 billion consensus. Adjusted revenue reached $12.63 billion, up 24% from $10.15 billion a year earlier, comfortably beating the $11.81 billion analyst estimate. Adjusted earnings per share came in at $2.02, surging past the $1.86 forecast. Free cash flow was a robust $3.03 billion, dwarfing the $1.98 billion estimate.
Orders and segment strength: Total orders hit $16.5 billion, a 17% increase year-over-year, continuing to outpace sales. The Commercial Engines & Services division posted revenue of $9.73 billion, up 27%, with services revenue up 26% and equipment up 30%. Defense & Propulsion Technologies saw revenue rise 16% to $3.44 billion, while its operating profit grew 18% to $475 million and margins widened to 13.8%.
Management lifted full-year guidance: GE Aerospace now projects 2026 adjusted EPS of $7.65-$7.85, compared with a prior range of $7.10-$7.40 and analyst consensus of $7.56. The company hiked its operating profit forecast to $10.55-$10.75 billion from $9.85-$10.25 billion, and free cash flow guidance to $8.9-$9.2 billion from $8.0-$8.4 billion. Revenue growth is now expected in the high-teens percentage range, up from a prior 10%-12% outlook. CEO H. Lawrence Culp, Jr. cited robust commercial services growth and record internal shop visit output as key drivers.
The results were released early to align with the upcoming Farnborough Air Show, a key event for aerospace players. Despite the beat-and-raise quarter, the stock’s decline reflects profit-taking after GE Aerospace’s shares had climbed over 30% from post-Iran-war lows, with a 52-week high earlier in July and a 17% gain year-to-date.
