GE Aerospace: Strength continues; Another big beat for Q2 - But, this time also a raise plus a positive Farnborough

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GE Aerospace: Strength continues; Another big beat for Q2 - But, this time also a raise plus a positive Farnborough

026 revenue growth stands at +20% growth, up vs prior guide of mid-teens. The primary difference

comes from Services, where GE now expects growth in the low-20s vs the previous mid-teens expectation. This implies over ~

$1bn improvement in commercial services revenue. We see the improved revenue expectations driven partly by a better CFM56

shop visit outlook and higher material availability. For CES Equipment, revenue is expected to grow in the +20% range, up from

prior guide of mid/high teens range. This implies a $200mn improvement in OE revenue as the LEAP delivery guide was also

raised for the year. For DPT, revenue is expected to grow in the low double-digit range, up from prior guide of mid to high single

digits.

CFM56 shop visits are expected to trend toward the high end of the 2,300 to 2,400 range for the year. Management

noted that CFM56 work scopes are expected to remain stable through 2028 and 2029, with revenue growth driven by higher

volumes, improved pricing, and better material availability. As a result, revenue per shop visit is increasing, not because of

broader work scopes, but because the company is now able to complete some of the heavier maintenance work that could

not previously be performed due to material constraints. GE expects CFM56 shop visits to remain in the 2,300–2,400 range

through 2028, with a modest decline thereafter. We expect shop visits for CFM56 to move slightly higher and extend further

than we see in GE’s guidance. We see spare parts and MRO shop capacity as the limiting factor that keeps GE’s forecast below

the demand level.

Widebody engine program workscopes remain favorable.