Key Takeaways for GE Aerospace Stock
- GE Aerospace posted revenue of $12.39 billion in Q1 2026, up 25% year-over-year.
- Operating income reached $2.50 billion as operating margins held at 20%, matching the prior quarter despite a 200-basis-point compression from the year-ago period.
- Gross profit grew 19% year-over-year to $3.85 billion, supported by a 39% surge in commercial services revenue.
GE Aerospace Surges Past $12 Billion in Revenue as Services Backlog Hits $170 Billion
GE Aerospace (GE), the world’s largest commercial jet engine maker, reported Q1 2026 revenue of $12.39 billion, a 25% increase year-over-year, beating analyst consensus by more than $1.6 billion.
The business designs, manufactures, and services jet engines for both commercial airlines and military customers across narrow-body, wide-body, and defense platforms.
Orders surged 87% to $23 billion in the quarter, with the Commercial Engines and Services segment (CES) driving 93% order growth including a commitment from American Airlines for more than 300 LEAP-1A engines.
Commercial services revenue grew 39%, powered by internal shop visit revenue up 35% and spare parts sales up 25% from improved material availability.
CFO Rahul Ghai told investors on the Q1 earnings call: “We started the year with over 20% top line and earnings growth.”
Total engine deliveries climbed 43%, including LEAP deliveries up 63%, as GE Aerospace’s FLIGHT DECK operating model drove double-digit output gains across the supply chain.
Defense and Propulsion Technologies (DPT) added to the picture, with revenue up 19% and a book-to-bill above 2 for the second consecutive quarter.
CEO Larry Culp confirmed the company is trending toward the high end of its full-year guidance range of $9.85 billion to $10.25 billion in operating profit, despite holding the range due to Middle East geopolitical uncertainty.
The commercial services backlog now stands above $170 billion, up nearly $30 billion since the end of 2024, providing multi-year demand visibility regardless of near-term departure softness.
The services volume story is undeniable, but what the income statement shows underneath it is what investors need to see. Pull up GE Aerospace stock on TIKR to track the margin trajectory quarter by quarter. Access GE Aerospace’s financial data on TIKR for free →
Gross Profit Compounds at 19% While Installed-Engine Mix Pushes Operating Margins Lower
GE Aerospace’s revenue of $12.39 billion in Q1 2026 represented 25% growth year-over-year, sustaining a run rate that began accelerating when CES services revenue crossed double-digit growth in mid-2024.
Gross profit reached $3.85 billion in Q1 2026, up 19% from $3.24 billion a year ago, as services volume and price more than offset the dilutive effect of the equipment revenue mix.
Gross margins held at 31% in Q1 2026, consistent with the 31% posted in Q1 2025, a flat result that masks the significant compositional shift taking place beneath the surface.
The tension is in the gap between gross profit and operating income: total operating expenses consumed $1.34 billion against $1.06 billion a year ago, a 26% increase that pulled operating margins to 20% from 22%.
R&D spending reached $440 million in Q1 2026, up from $360 million a year prior, as GE Aerospace accelerated investment in LEAP durability upgrades and RISE next-generation engine architecture.
SG&A rose to $900 million from $700 million in Q1 2025, a 29% increase driven in part by the $120 million increase in corporate costs and environmental expenses Ghai flagged on the call.
Operating income came in at $2.50 billion, roughly flat sequentially from $2.49 billion in Q4 2025 and up 15% from $2.18 billion a year ago, confirming that the business is still growing earnings in absolute terms.
The 200-basis-point operating margin compression from the year-ago period reflects a deliberate trade-off: installing more loss-making GE9X and LEAP engines now to capture the high-margin services tail for the next two decades.
GE Leads RTX on Operating Margins by a Wide Margin, While TransDigm Operates in a Different Stratosphere
TransDigm Group (TDG) has held operating margins above 44% in every quarter shown, reaching 49% in Q4 2024 before settling at 47% most recently in Q1 2026, a structural advantage that reflects its proprietary components business model rather than a comparable engine-and-services franchise.
The relevant comparison is GE against RTX Corporation (RTX): GE Aerospace has maintained operating margins between 19% and 28% across the eight quarters, while RTX has ranged from 9% to 13% over the same period, a gap that has widened rather than narrowed as GE’s services mix has scaled.
RTX posted 13% operating margins in Q1 2026, its best reading in the dataset, still 7 percentage points below GE’s 20% in the same quarter, confirming that GE Aerospace’s margin compression story is a GE-specific mix effect rather than an industry-wide deterioration.
TIKR’s $541 Target on GE Stock: Strong Upside if the Services Thesis Holds
TIKR’s model values GE Aerospace at approximately $541 by December 2030, implying around 61% total return from the current price of $335, or roughly 11% per year.
The case for that target rests on the gross profit compounding dynamic already visible in the income statement: services revenue growing faster than operating expenses over the next four years, converting today’s margin compression into expansion as LEAP shop visits scale and GE9X losses peak around 2028.
The TIKR model gives you the full scenario breakdown. Explore the bear, mid, and bull case projections for GE Aerospace stock directly on the platform. View the GE Aerospace valuation model on TIKR for free →
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Is GE Aerospace stock a buy right now?
GE Aerospace stock trades at around $335, near the midpoint of its 52-week range of $176 to $348, with 22 analysts holding a Strong Buy consensus.
The investment case turns on whether services margin expansion from the LEAP platform offsets near-term operating cost growth.
