GE Aerospace Q1 FY2026 earnings call

• Addressed Middle East conflict and geopolitical environment, prioritizing safety. - First quarter results strong with orders, revenue, operating profit, EPS, free cash flow up. - Global departures up low single digits, reduced full-year departures outlook. - Flight Deck enabling improvements in output, turnaround times, cost. - Collaborative problem solving with suppliers, airframers, etc. - Investment in U.S. manufacturing and supplier base. - Progress in defense and systems, RISE program, next-gen technology.

In Q1 2026, orders were up 87%, with CES nearly doubling and DPT up 67%, including record defense orders. Revenue increased 29% driven by CES services and double-digit growth in DPT. Operating profit grew 18% with both segments up double digits. CES orders grew 93%, services up 49%, equipment more than tripling to nearly $8B, revenue up 34%, profit $2.4B up nearly $450M. DPT orders increased 67%, revenue grew 19%, profit grew 17%.

Maintaining full-year guidance with low double-digit revenue growth, profit $9.85B to $10.25B, EPS $7.10 to $7.40, free cash flow $8B to $8.4B. Second quarter services expected to be up high teens. Backlog provides resilience.

Potential impact of Middle East conflict and geopolitical environment on air traffic and services. Delinquency in spare parts shipments due to demand exceeding supply. Uncertainty in macroeconomic backdrop affecting future demand.

Q: Clarify impact on services growth from lower departures forecast, A: Larry and Rahul discuss 2026 outlook, fleet youth, backlog.

Q: Follow-up on services growth, visibility, risk post-Q4, A: Rahul talks about visibility, retirement rates.

Q: Strong spare parts orders, prebuying?

A: Culp says no evidence of pull-forward.

Q: 2Q and 3Q engine removal pipeline, revisions?

A: Culp and Rahul discuss guidance, progress.

Q: LEAP aftermarket profitability, margin expansion?

A: Rahul talks about trends, margin improvement.

Q: Spare parts delinquency, cause, time to fix?

A: Culp says due to demand exceeding supply, goal to reduce.

Q: Airline financial pressure, impact on overhaul, LTSAs?

A: Culp talks about scenarios, supporting customers.

Q: GE9X fatigue issue update?

A: Culp says no change on schedule, losses.

Q: Aeroderivatives strategy, upside?

A: Rahul talks about pricing, volume.

Q: CES margins, margin risk, offset?

A: Rahul talks about margins, LEAP margin trajectory.

Q: Defense segment growth sustainability?

A: Rahul talks about DPT growth, margins.

Q: Jet fuel spread, impact?

A: Culp talks about assumptions, lag in aftermarket.

Q: Supply chain, material improvement, customer segment risk?

A: Culp and Rahul talk about supply chain progress, customer behavior.