GE Aerospace CFO Rahul Ghai told investors at Morgan Stanley's 14th Annual Laguna Conference on Sept. 17 that the company’s $210 billion-plus backlog will underpin earnings expansion through 2026 and beyond. The backlog includes $170 billion in commercial services and more than 2,000 GEnx engines awaiting delivery.
Ghai said the firm expects profit growth of over $1.5 billion in 2026, with services revenue rising more than 20 percent and defense earnings delivering low‑double‑digit growth in 2026 followed by double‑digit growth in 2027. Full‑year free‑cash‑flow conversion is targeted at 100 percent, after achieving 140 percent in Q2 2024.
The CFO highlighted the recent acquisition of Chromalloy Performance Products (CPP) as the largest standalone deal for GE Aerospace. CPP is expected to generate $200 million in synergies by year three, rising to $400 million by year six, and to be accretive to earnings per share and cash flow in the first year. Ghai added that the deal should deliver a double‑digit return on invested capital within a few years and alleviate casting constraints for new airfoil technology.
Backlog‑driven growth is reinforced by a robust order pipeline. At the Farnborough Airshow the company secured 1,800 new engine orders. IndiGo Airlines placed a landmark order for more than 1,000 LEAP‑1A engines, while Korean Air ordered 100 engines and associated services. Ghai noted that airline confidence in engine performance has risen sharply, marking a “sea change” from previous years.
Production metrics also point to higher volumes. GE9X deliveries rose 50 percent year‑over‑year in Q2, and LEAP deliveries are expected to increase in the high‑teens percent range. Boeing’s 737 MAX production target is slated to climb from the low 40s to 60 units per month, and 787 output is projected to double to 14 per month.
On the services side, shop capacity is oversubscribed by 40 percent for 2026, and engines awaiting shop entry are up 60 percent year‑over‑year. CFM56 engine retirements have slowed to 1.5‑2 percent annually, with 80 percent of work on aircraft younger than 20 years. Expected CFM56 shop visits total 2,300‑2,400 per year in 2026‑27. LEAP durability kits are being rolled out on Airbus (2025) and Boeing (Q1 2026), with target cycles of 17,000‑18,000 in neutral environments and 8,000‑10,000 in hot conditions. LEAP repair volumes are growing over 20 percent annually, and third‑party shop share is projected to reach 30 percent by 2030.
Ghai concluded that GE Aerospace’s franchise powers two‑thirds of U.S. combat aircraft, underscoring the strategic importance of its defense business. With a market cap of $329.7 billion, a 21.7 percent revenue increase over the past twelve months and a P/E of 37.5, the company aims to sustain momentum through higher backlog conversion, the CPP acquisition and continued engine profitability.
