GE Aerospace reported better-than-expected quarterly results, driven by robust demand for air travel which helped counterbalance challenges from rising fuel costs and supply chain disruptions linked to conflict in Iran. The company also projected that its full-year profit would likely reach the upper end of its forecast, while cautioning that high oil prices, fuel supply constraints, and slowing global growth could pose short-term headwinds.
Data showed that GE Aerospace's total first-quarter revenue increased by 25% to $12.39 billion. Adjusted sales reached $11.6 billion, up nearly 30% year-over-year and surpassing market expectations of $10.7 billion. Operating profit rose 18% to $2.5 billion, exceeding analysts’ average estimate of $2.24 billion. Adjusted earnings per share came in at $1.86, higher than the expected $1.60 and up from $1.49 a year earlier.
Recent tensions involving Iran have disrupted operations for several airlines in the Middle East and led to a sharp increase in jet fuel prices. Many carriers have announced capacity cuts to cope with billions of dollars in additional fuel expenses. Since late February, joint U.S.-Israel military actions against Iran have disrupted shipping through the Strait of Hormuz, causing the most significant shock to global oil supply since the COVID-19 pandemic and sending jet fuel prices soaring.
In response to the surge in costs, airlines have been forced to reduce flights and retire unprofitable routes. Market observers anticipate this could lead to reduced spending on aircraft maintenance and aftermarket services. Despite these pressures, GE Aerospace's sales continued to grow, largely due to strong demand for spare parts and maintenance services from airlines.
Although aircraft manufacturers such as Boeing and Airbus have increased delivery rates, supply of new aircraft still falls short of airline demand, leading carriers to extend the service life of older fleets. This tight supply-demand environment benefits engine manufacturers, as a significant portion of their profits comes not from engine sales but from long-term service agreements with airlines.
Additionally, GE Aerospace's supply chain conditions are improving, supporting increased deliveries of new engines. In the first quarter, revenue from commercial engines and services rose 34% to $8.92 billion, while defense and propulsion technology revenue grew 19% to $3.21 billion. Commercial engine orders jumped 93% to $17.3 billion, and defense orders increased 67% to $6.2 billion.
J.P. Morgan analyst Seth Seifman noted in a research report, "Despite recent disruptions to air travel, the imbalance between supply and demand for engine maintenance remains severe and is expected to persist over the coming quarters."
Looking ahead, GE Aerospace reaffirmed its full-year 2026 earnings per share guidance of $7.10 to $7.40, indicating that strong early-year performance positions results toward the higher end of that range. The company also updated its macroeconomic assumptions, anticipating that Brent crude prices will remain elevated through the third quarter before moderating by year-end. It also factored in short-term impacts from tight fuel supplies and expectations for subdued global GDP growth in 2026, along with flat to low single-digit growth in flight departures.
The company emphasized that its guidance does not assume a global recession. "Amid a dynamic geopolitical landscape, we are maintaining our full-year guidance. Based on a strong start to the year, we expect full-year performance to trend toward the high end of the range," said CEO Larry Culp in a statement.
Boosted by the positive earnings report, GE Aerospace shares rose more than 4% in premarket trading, though they later turned negative. Since the escalation of Iran-related tensions in late February, the company's stock has faced pressure. As of Monday's close, it was down about 1.4% year-to-date, underperforming the S&P 500 index, which gained nearly 3.9% over the same period.
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