Adjusted earnings of $2.25 a share beat estimates by 12% and orders jumped 49%. The company lifted its full-year outlook for profit, earnings and cash and now expects services to grow at a double-digit pace next year. The shares were down about 3.6% after rising before the open.
GE Aerospace delivered the quarter investors asked for. They had asked for more.
The jet-engine maker reported third-quarter adjusted earnings of $2.25 a share, up 36% from $1.66 a year earlier and above the FactSet consensus of $2.01. Adjusted revenue rose 18% to $13.29 billion, about 3% above forecasts of roughly $12.9 billion. Operating profit rose 30% to $2.99 billion, a margin of 22.5%, up 2.2 percentage points. Orders jumped 49% to $19.0 billion.
"We are raising our 2026 guidance across the board, and we now expect 2027 commercial services to grow low-double-digits supported by our over $170 billion commercial services backlog," Chief Executive Larry Culp said.
The shares rose about 1% before the open. By about 2 p.m. Eastern, they were down 3.6% at $300.18.
What was raised
The new forecasts lift every major line. Adjusted earnings per share for 2026 are now expected at $8.00 to $8.10, up from $7.65 to $7.85, and above the LSEG consensus of $7.92. Operating profit is forecast at $10.9 billion to $11.0 billion, from $10.55 billion to $10.75 billion. Free cash flow is now expected at $9.1 billion to $9.4 billion, from $8.9 billion to $9.2 billion.
What fell
Two numbers moved the wrong way. Free cash flow in the quarter fell 14% to $2.04 billion from $2.36 billion, and cash from operating activities fell by the same proportion. For a company whose investment case rests heavily on converting profit into cash, a quarter in which profit rose 30% while cash fell 14% invites questions.
The second is in the largest segment. Commercial Engines and Services, which produced $10.3 billion of the quarter's revenue, grew sales 21%, but its margin slipped 0.1 percentage point to 27.9%. A small dip, but in a business where investors expect margins to climb as aftermarket work grows, it is the direction that matters.
The full-year cash forecast was raised by $200 million at the midpoint, which suggests GE sees the shortfall as timing. Investors appear to want proof.
What management highlighted
Executives pointed to certification of the GE9X engine, which is targeted by the end of 2026, and to deliveries of GEnx engines running ahead of Boeing's aircraft deliveries. Both points matter for 2027, because new engines seed the service revenue that drives most of GE's profit over the following decades.
Market implications
One reading is that the selloff is about expectations, not the business. Orders rose by half, every forecast went up, and services growth is expected to stay in double digits next year with a backlog of more than $170 billion.
A second reading is that the cash flow decline deserves weight. Profit and cash moved in opposite directions, the core segment's margin edged down, and a company valued on future cash generation is reporting less of it in the near term.
What to watch
Fourth-quarter free cash flow against the raised full-year range; services margins in the commercial engines business; GE9X certification; Boeing's delivery pace; and RTX's Pratt & Whitney commentary on the engine aftermarket. A strong fourth-quarter cash figure would answer the main question raised on Tuesday.