GE boosts profit outlook, but stock falls as booming order growth cools

By Tomi Kilgore

Orders are still rising, if not at the breakneck pace seen over the past couple of quarters

GE Aerospace's stock falls after earnings, again, despite and profit beat and raised outlook.

Shares of GE Aerospace were slumping in early Thursday trading after the jet-engine maker and defense contractor raised its full-year profit outlook but showed the rapid order growth it has recently experienced was slowing down.

The raised outlook marked a change for the company, as GE was reluctant to do so three months ago despite a big earnings beat because of uncertainties over fuel prices, and how that would affect air-travel demand amid the Iran conflict.

"Given our exceptional year-to-date performance and visibility for the remainder of the year, we are raising our full-year guidance across the board," CEO Larry Culp said.

Still, the stock (GE) was down 4.3% ahead of Thursday's open and was trading about 9% below its July 6 record close of $378.68. The selloff shouldn't be much of a surprise to investors, however, as the stock sank 5.6% on the day the previous earnings report was released, and dropped 7.4% after the one before that, even though profit and revenue beat expectations each time.

For the second quarter ending June 30, net income rose 17.2% from a year before to $2.8 billion, while adjusted earnings per share increased to $2.02 from $1.66 and topped the average analyst estimate compiled by FactSet of $1.86.

Revenue excluding nonrecurring items grew 24.5% to $12.63 billion, to beat the FactSet consensus of $11.87 billion, as total orders rose 17% to $16.5 billion. In April the company had reported order growth of 87%, accelerating from 74% growth reported in January.

For 2026, the company raised its growth outlook for adjusted revenue to a high-teens percentage range from a percentage in the low double digits and boosted its adjusted EPS guidance to a range of $7.65 to $7.85 from $7.10 to $7.40.

Among GE's business segments, commercial engines and services revenue rose 27.3% to $9.73 billion, as equipment revenue climbed 30% and both spare parts and shop-visit revenue rose 25%. Orders increased 17.7% to $12.93 billion.

Defense and propulsion-technologies revenue was up 15.6% to $3.44 billion, while orders rose 12.5% to $4.14 billion.

Free cash flow jumped 42.8% to $3.03 billion, well above the FactSet consensus of $1.81 billion. And full-year guidance for free cash flow was raised to a range of $8.9 billion to $9.2 billion from a prior range of $8 billion to $8.4 billion.

GE's stock has been on a roll, as it had rocketed 491% in three years through 2025, and it has gained 17% this year through Wednesday. In comparison, the S&P 500 index SPX has advanced 10.6% this year, after rising 78% over the previous three-year period.

-Tomi Kilgore

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