GE Aerospace (NYSE:GE) reported third-quarter 2026 revenue of $14.12 billion, a 24.9 percent increase year over year that exceeded analyst estimates of $12.86 billion by 9.8 percent. The company also posted adjusted earnings per share of $2.25, surpassing the consensus estimate of $2.01 by 12 percent.
Management raised its full-year adjusted EPS guidance to a midpoint of $8.05, representing a 3.9 percent increase from prior projections. This upward revision comes as Wall Street analysts project the company's full-year EPS to grow 14.2 percent from $7.70 to $8.79 over the next 12 months.
Despite the strong top-line performance, GE Aerospace's free cash flow margin contracted to 14.5 percent in the quarter, down from 20.9 percent in the same period last year. The stock closed flat at $311.10 immediately following the results, with a market capitalization of $323 billion.
The quarterly results extend a trend of accelerating growth. Over the last two years, GE Aerospace's annualized revenue growth reached 21.9 percent, outpacing its five-year compounded annual growth rate of 19 percent. Sell-side analysts expect this growth rate to decelerate to 8.5 percent over the next 12 months.
Profitability metrics have remained stable despite the revenue surge. GE Aerospace's operating margin has averaged 18.6 percent over the last five years and has stayed relatively consistent over the past 12 months. This stability persists even as the company operates with a low gross margin, a characteristic often driven by the nature of its product mix.
Adjusted EPS for the quarter rose to $2.25 from $1.66 in the same quarter last year. Over the last five years, EPS grew at a compounded annual rate of 33 percent, significantly higher than the 19 percent annualized revenue growth rate. However, this divergence is attributed to reduced interest expenses or taxes rather than operational leverage, as operating margins did not improve and the company did not repurchase shares during that period.
Over the last two years, GE Aerospace's annual EPS growth accelerated to 35.4 percent, exceeding its five-year trend. The company, one of the original components of the Dow Jones Industrial Average, provides technologies for aviation, power, renewable energy, and healthcare sectors.