General Electric Company (GE) Q1 FY26 earnings call: guidance and Q&A

Will the lower departures outlook impact services growth in 2026 or 2027, and are you seeing increased CFM56/GE90 retirements?

Management expects a strong Q2 with good visibility, maintaining the full-year guide due to backlog. Any services impact from sustained softness in departures would likely lag into 2027. No increase in parked aircraft or retirements has been observed, with Q1 CFM56 retirements being sub-1%.

“I think what we're acknowledging it's very hard for any of us to call the duration of what's happening in the Middle East at this point. By holding the guide, I think what we've suggested is that the backlog that we have, the visibility that we do have for the second half should allow us to be within that guide that we offered up 90 days ago.”

asked by David Strauss · answered by H. Culp

Given strong Q1 services growth (39%) and Q2 expectations (high teens), why is H2 implied to be mid-to-high single digits, and what are the retirement rate assumptions for 2026/2027?

Visibility for Q2 is strong, with 95% of spare parts in backlog and all Q2 shop visits off-line. The Q2/Q3 engine removal pipeline exceeds the shop visit guide. While Q1 CFM56 retirement rates were sub-1%, the company's outlook assumes 2% for 2026 and 3-4% for 2027, indicating prudence for H2 due to macro unknowns.

“Now keep in mind that the retirement rates that we resume for, 2026 for CFM56 are in the 2% range. And what we saw in the first quarter is sub-1%. And as we get into 2027, we've already assumed in our prior outlook, the retirements increased to 3% to 4%.”

asked by Sheila Kahyaoglu · answered by Rahul Ghai

With the higher engine removal pipeline exceeding the shop visit guide, could guidance be revised higher if macro issues resolve?

Management stated that if not for current macro events, they would be discussing an increase in guidance. The higher removal pipeline is not fully factored into the current outlook, and achieving higher shop visit numbers would require better material flow to reduce existing delinquency.

“Kristine, I think it were not for current events, we'd be talking about an increase in the guide this morning not color and body language toward the high end of the existing range.”

asked by Kristine Liwag · answered by H. Culp

How are LEAP aftermarket margins trending in 2026, and what is the path to margin expansion beyond 2026?

LEAP aftermarket margins are expected to improve further in 2026, driven by increased volume, doubling of repair development, and growth in the external MRO network (15% of LEAP shop visits by third parties). Management expects LEAP service margins to approach overall CES service margins by 2028.

“We are expecting a further improvement this year on margins. Trends have been good for the first half of the year. here. And it's coming from a few things. It's coming from increased volume, right, that we are driving in our shops.”

asked by Scott Deuschle · answered by Rahul Ghai

Can you provide an update on the GE9X Mid Seal fatigue issue and any changes to loss expectations?

There is no change to the schedule or loss expectations for the GE9X program. A durability issue with the Mid Seal was identified in January, believed to be at root cause, and modifications are being finalized. The 777X flight test program continues, and deliveries will be weighted towards the second half of the year.

“No change on schedule, no change on losses. I just start Scott, to reiterate that we're thrilled to be the sole source partner on the 777X. We've got over 1,000 engines now on order and customers want the engines, they want the airplanes.”

asked by Scott Mikus · answered by H. Culp