GE Aerospace

GE Aerospace is the operating name of General Electric Company, SEC Central Index Key 0000040545, the residual pure-play aerospace business left after the 2023 spin-off of GE HealthCare and the 2024 spin-off of GE Vernova. It builds and services commercial and military aircraft engines and related systems, and it is one of three Western large commercial engine houses alongside Pratt & Whitney and Rolls-Royce.

The strategic point for a national-security reader is proportion. Direct sales to agencies of the U.S. Government were 10% of total revenue in 2025, down from 12% in 2024 and 14% in 2023. That share fell while defense revenue grew, because commercial aftermarket grew faster. GE Aerospace is a commercial aerospace company with a large military propulsion franchise, not a platform-level defense prime.

GE Aerospace designs, manufactures and maintains the engines that move aircraft, plus the systems around them. The commercial half sells engines to Boeing, Airbus and airlines, then earns most of its profit over the following decades servicing them. The military half sells engines to the U.S. armed services and to allied governments through Foreign Military Sales, and services those too.

The economics rest on an installed base of roughly 50,000 commercial and 30,000 military engines. Equipment placements create decades of potential shop-visit, spare-parts and long-term service demand, making the installed base central to the company's economics. That is why remaining performance obligation of $210.8 billion at 30 June 2026 is dominated by services at $178.7 billion, against equipment at $32.1 billion.

The company reports two segments. Commercial Engines & Services (CES) was 73% of 2025 revenue. Defense & Propulsion Technologies (DPT) was 23%, with services at 51% of DPT revenue. DPT is an aggregation of two operating businesses: Defense & Systems, which builds military engines and aircraft systems, and Propulsion & Additive Technologies, which builds components, transmissions, propellers, ignition systems and additive parts under the Avio Aero, Unison, Dowty and Colibrium Additive brands.

What it means for national security. GE engines power a large share of the U.S. and allied fighter, rotorcraft and trainer fleets. The F110 powers F-15 and F-16 aircraft, the F404 and F414 power the F/A-18 and a widening set of trainers and light combat aircraft, and the T700, T408 and T901 cover Army and Marine Corps rotorcraft. Concentration of this kind is a readiness dependency as much as a commercial position.

What it means for capital. The services-weighted RPO provides long-dated revenue visibility, but recognition depends on shop-visit throughput, customer flight activity and supplier input. GE Aerospace separately guides free-cash-flow conversion above 100% of adjusted net income. That cash-conversion measure does not describe the conversion of RPO into revenue.

Commercial Engines & Services

LEAP, produced through the CFM International 50/50 joint venture with Safran, is the volume program and powers the Boeing 737 MAX and one engine option on the Airbus A320neo family. GEnx powers the Boeing 787 and 747-8. GE9X powers the Boeing 777X. Legacy CF6, CF34 and CFM56 fleets continue to generate shop visits and spare parts.

In the first half of 2026 total engine deliveries rose 31% and LEAP deliveries rose 41%. The company completed certification of the LEAP-1B durability kit including an upgraded high-pressure turbine blade, which it expects to roughly double time-on-wing, with full cutover starting at the beginning of 2027. A comparable GEnx high-pressure turbine blade surpassed 4,000 cycles in November 2025 with time-on-wing improved more than 2.5 times in hot and harsh environments.

Defense & Systems

Combat engines: F110 for the F-15 and F-16, F404 and F414 for the F/A-18 and a growing trainer and light-combat set including the Turkish Aerospace HÜRJET and the Indian Tejas. Rotorcraft engines: T700 for the Black Hawk, Apache and Seahawk, T408 for the CH-53K King Stallion, and T901 under the Army's Improved Turbine Engine Program (ITEP) to re-engine the Black Hawk and Apache. Mobility and marine: LM2500 aeroderivative engines, which moved into the DPT segment in the January 2026 reporting change. The business sold 635 defense engines in 2025, against 490 in 2024 and 556 in 2023.

Advanced development runs alongside production. The company completed the Assembly Readiness Review of the XA102 adaptive-cycle engine in the second quarter of 2026, and secured a U.S. Air Force contract to mature the GE426 through preliminary design review for a medium-thrust-class Autonomous Collaborative Platform. The GEK800, developed with Kratos Defense, received the U.S. military type designation F143-ZZ-100 in August 2026 alongside an Engineering, Manufacturing and Development contract as a second-source propulsion option for the Joint Air-to-Surface Standoff Missile (JASSM).

Propulsion & Additive Technologies

Avio Aero, Unison, Dowty Propellers and Colibrium Additive supply small turboprop engines, aeroengine mechanical transmissions, turbines, combustors, controls, propeller systems, ignition systems, sensors and additive-manufactured parts. GE Aerospace describes Avio Aero as the propulsion champion for the Italian Ministry of Defence. Avio Aero contributes to the EJ200 for Eurofighter and to the Global Combat Air Programme (GCAP) engine, and produces the Catalyst engine for Eurodrone. This is the segment's fastest-growing piece, up 23% in Q2 2026.

GE Aerospace, NASA, BETA Technologies and Boeing subsidiary Aurora Flight Sciences completed a hybrid-electric flight above 30,000 feet on 20 May 2026 under NASA's Electrified Powertrain Flight Demonstration project. The demonstration reached commercial-airliner cruise altitude; it does not establish certification or production readiness.

Ceilings, obligations and supplier orders are stated separately. An IDIQ ceiling is not funded backlog. GE Aerospace does not disclose defense backlog as a standalone figure. Its $210.8 billion RPO is a total-company measure dominated by commercial services and must not be described as defense backlog.

Second-quarter 2026 GAAP revenue was $13,349 million, up 21% year over year. Adjusted revenue, which excludes the run-off insurance business, was $12,634 million, up 24%. GAAP profit was $2,801 million, up 17%, at a 21.0% margin. Continuing diluted EPS was $2.30, up 23%. Adjusted EPS was $2.02, up 22%. Cash from operating activities was $3,258 million, up 39%, and free cash flow was $3,027 million, up 43%. Total orders were $16.5 billion, up 17%.

By segment, CES revenue was $9,731 million, up 27%, with services up 26%, internal shop visit revenue up 25% and spare-parts revenue up more than 25%. CES operating profit was $2,657 million, up 20%, though margin fell 160 basis points to 27.3%. DPT revenue was $3,443 million, up 16%, split $1,744 million equipment and $1,699 million services. Within DPT, Defense & Systems revenue rose 12% with deliveries up 7%, and Propulsion & Additive Technologies rose 23% led by Avio Aero. DPT operating profit was $475 million, up 18%, with margin up 30 basis points to 13.8%.

Remaining performance obligation was $210,790 million at 30 June 2026: equipment $32,085 million, of which 32%, 54% and 91% is expected to be satisfied within one, two and five years, and services $178,705 million, of which 12%, 40%, 66% and 82% is expected to be recognized within one, five, ten and fifteen years. RPO was $190.564 billion at 31 December 2025, up $18.929 billion or approximately 11% from a year earlier. It increased another $20.226 billion by 30 June 2026.

On 16 July 2026 the company raised full-year 2026 guidance across every line. Adjusted revenue growth moved to high-teens from low-double-digit. Operating profit moved to $10.55 to $10.75 billion from $9.85 to $10.25 billion. Adjusted EPS moved to $7.65 to $7.85 from $7.10 to $7.40. Free cash flow moved to $8.9 to $9.2 billion from $8.0 to $8.4 billion, at above 100% conversion. Within that, CES operating profit is guided to $10.25 to $10.35 billion and DPT to $1.6 to $1.7 billion on low-double-digit DPT revenue growth, raised from mid- to high-single-digit. The 2025 comparison base is adjusted revenue of $42.3 billion, operating profit of $9.1 billion at a 21.4% margin, adjusted EPS of $6.37 and free cash flow of $7.7 billion. All of these are non-GAAP measures, and the company states it cannot reconcile the 2026 guidance figures to GAAP without unreasonable effort, in part because of mark-to-market on its investment in BETA Technologies.

The near-term growth levers are supplier material input, which the company increased by double digits both sequentially and year over year, shop-visit throughput, spare-parts pricing and volume, and military engine delivery rates. The medium-term levers are the LEAP-1B durability cutover beginning in 2027, T901 fielding if the Army funds it, F110 and F404 Foreign Military Sales volume, and next-generation propulsion work on XA102 and GE426.

What the defense reader should watch. The verified 2026 inflection points are the F143-ZZ-100 designation and JASSM EMD contract, the GE426 preliminary-design-review contract, the T408 multiyear procurement and additive-manufacturing qualification work. GE is moving into propulsion classes relevant to standoff weapons and autonomous aircraft while defending long-held fighter and rotorcraft positions. T901 has completed first flight on a Black Hawk, but production remains exposed to Army testing funds and procurement priorities. An August preliminary flight-rating milestone has appeared in trade reporting but has not been independently confirmed here through a primary source.

What the capital reader should watch. GE repurchased 6.9 million shares for $2.012 billion in Q2 and 14.1 million shares for $4.223 billion in the first half while announcing another $1 billion of U.S. manufacturing investment. Shares outstanding fell from 1,048.8 million at year-end 2025 to 1,037.6 million at 30 June 2026. CES operating margin declined 160 basis points even as profit rose 20%, reflecting the cost and mix effects of higher equipment volume. Equipment delivered today can expand the future service base, but the near-term margin tradeoff remains measurable.

What public disclosure does not show. GE does not separately disclose defense backlog, funded-versus-unfunded totals across all government contracts or consolidated gross profit. Defense modeling therefore relies on segment revenue, disclosed contract actions and unit deliveries rather than a company-published defense-backlog figure.

Nothing in this section is a recommendation to buy, sell or hold a security. Valuation multiples describe current pricing assumptions.

The moat has three load-bearing elements. First, an installed base of roughly 50,000 commercial and 30,000 military engines creates decades of potential shop visits and spare-parts demand. Second, certification, qualification and integration barriers make switching propulsion systems slow and expensive. Third, long-term service agreements and multiyear production contracts such as T408 Lots 9 through 13 translate technical positions into contracted work years ahead of delivery. These advantages are substantial, but they are program-specific and do not eliminate competition for future platforms or aftermarket work.

Vertical capability in additive manufacturing through Colibrium Additive, and in transmissions, propellers, controls and ignition systems through Avio Aero, Unison and Dowty, adds a second layer. It gives GE more internal capability in selected constrained processes and components, although the company remains dependent on a broad external supplier network.

The structural dependency. LEAP, the highest-volume program in the portfolio, is produced through CFM International, a 50/50 joint venture with Safran. GE does not control that program alone. Safran is a partner rather than a competitor on LEAP, but the arrangement means half the economics and half the decision rights on the company's most important commercial engine sit with another firm. Any analysis that treats LEAP as a wholly owned GE franchise overstates the position.

Where the moat is thinnest. Share on next-generation commercial programs is genuinely contestable, and a loss there compounds for thirty years through the aftermarket. On the military side, sustained production shortfalls invite exactly the second-source pressure GE is now applying to someone else with the GEK800. The company understands the mechanism because it is currently the challenger in that lane.

Execution and supply chain. The single largest risk is the one the company talks about most. Converting a $210.8 billion remaining performance obligation into revenue and cash depends on supplier material input and internal shop-visit throughput. Both improved through the first half of 2026 and both underwrote the July guidance raise. A reversal would flow directly into deliveries, revenue recognition and free-cash-flow conversion.

Program and budget risk on T901. ITEP has completed first flight on a Black Hawk. An August 2026 preliminary flight-rating milestone has been reported by a specialist publication but is not treated here as primary-source confirmed. It has not cleared its funding gates. Company representatives publicly flagged in April 2026 that the program needs additional testing money in the FY27 budget. A technically successful engine that Congress does not fund produces development revenue and no production revenue. This is the clearest example on the page of the difference between a program milestone and a procurement outcome.

Cyclicality and customer concentration. Commercial aftermarket earnings track air traffic, and air traffic tracks the economy. The company's own 2026 guidance assumptions contemplate elevated brent crude through the third quarter, near-term fuel availability impacts, reduced global GDP estimates and flat to low-single-digit departures growth. Guidance does not assume a global recession, which is a stated assumption rather than a forecast, and a reader should treat it as such. On the equipment side, a small number of airframers and a concentrated set of airline and lessor customers drive placement decisions.

Government contracting risk. As a U.S. government contractor the company is subject to audits, investigations, and the government's ability to modify, curtail or terminate contracts. Most Defense & Systems revenue flows from the U.S. defense budget or equivalent international budgets, which makes appropriations timing a direct operational variable.

Non-GAAP and reconciliation opacity. Every 2026 guidance figure is a non-GAAP measure, and the company states it cannot reconcile them to GAAP without unreasonable effort, citing acquisition and disposition timing, restructuring timing, and mark-to-market on its equity investment in BETA Technologies. A reader comparing guided adjusted EPS of $7.65 to $7.85 against trailing GAAP EPS of $8.48 is comparing two different things.

Segment comparability. The January 2026 move of the aeroderivative business from CES into DPT means DPT growth rates now include a non-defense commercial and industrial product line. Prior periods were recast, but any model or press account using pre-recast DPT figures will misstate defense trajectory.

Annual reports · GE Aerospace SEC filings · SEC EDGAR issuer page

Major Beneficial Owners

Institutional positions are dated filing snapshots, not live holdings. The Vanguard and BlackRock values are the latest 5% owner figures presented in GE Aerospace's 2026 proxy; FMR's later amendment supersedes the proxy's older Fidelity figure. Percentages use the class totals applicable to each filing and should not be added to infer control.

Recent Section 16 Transactions

Each transaction paired the exercise of vested employee stock options with a same-day sale. Some sale prices are weighted averages. Form 144 notices are proposed-sale notices and are not counted as executed transactions. Section 16 filings cover directors, executive officers and other reporting insiders; Schedules 13D and 13G cover reportable beneficial ownership.

General Electric's aviation business dates to the early jet age and grew into one of the three major Western commercial engine manufacturers. For most of the twentieth century it was a division of a conglomerate. The current company is what remained after that conglomerate was taken apart: GE HealthCare separated in January 2023, GE Vernova separated in April 2024, and the aerospace business kept the legal entity, the New York incorporation and the historic GE ticker.

No material acquisition was disclosed in the 2025 to 2026 window. The Q2 2026 Form 10-Q did record $14 million of DPT goodwill from an immaterial acquisition without separately identifying the target. The consequential corporate actions have been the reverse, separations, plus internal reorganization and capacity spending. On 15 January 2026 the company announced a segment change: CES expanded to cover the entire commercial engine lifecycle including safety and quality, product management, engineering, supply chain, manufacturing and aftermarket services, and the Aeroderivative business moved from CES into DPT. Prior-period amounts were recast. Any comparison of DPT results across that boundary must use the recast figures, and DPT is no longer a clean proxy for defense revenue.

Under Chairman and CEO H. Lawrence Culp, Jr., the operating agenda has been the FLIGHT DECK lean operating system, supplier input recovery, shop-visit throughput and capacity. The company announced $1 billion of U.S. manufacturing investment on 9 March 2026, its second consecutive annual $1 billion commitment, bringing announced U.S. investment since 2024 to more than $2.5 billion, with about 5,000 planned U.S. manufacturing and engineering hires and more than $100 million directed at the supplier base.