Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Revenue | $2.7 billion | up 29% year-over-year |
| EBITDA | $879 million | up 43% year-over-year |
| Earnings per share | $1.46 | up 54% year-over-year |
| Free cash flow | $562 million | Not stated |
| Engine Products revenue | $1.45 billion | up 33% year-over-year |
Guidance and outlook
- Q4 2026 revenue is expected to be approximately $2.75 billion, plus or minus $10 million.
- Q4 2026 EBITDA is expected to be $900 million, plus or minus $5 million.
- Q4 2026 EPS is expected to be $1.50, plus or minus $0.01.
- Full year 2026 revenue guidance is $10.3 billion, plus or minus $10 million.
- Full year 2026 EBITDA guidance is $3.33 billion, plus or minus $5 million.
- Full year 2026 EPS guidance is $5.50, plus or minus $0.01.
- Full year 2026 free cash flow guidance is $2 billion, plus or minus $50 million.
- Initial 2027 revenue outlook is approximately $11.5 billion, representing 12% growth plus or minus 0.5%.
How management sounded
Positive (+7 on our -10 to +10 scale). Management raised full-year guidance across all metrics and highlighted record growth, while noting that demand in key segments like IGT and aerospace remains robust well into the future. Management sounded more upbeat than on 48% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Competitive landscape and vertical integration
Asked: How does management view the competitive dynamics of aerospace blades and vanes as OEMs like Pratt & Whitney and GE pursue vertical integration?
Answer: Management emphasized their long-standing relationships with engine customers and noted that their technological capabilities and scale take decades to replicate. They believe their investments in capacity will continue to support market share.
Industrial Gas Turbine (IGT) growth
Asked: How does the company view the long-term demand for IGTs given the rise of data centers and power needs?
Answer: Management sees exceptional demand for IGTs driven by data center power requirements. They noted that their IGT order book is largely filled through 2031 and they are planning further capacity investments to meet this multi-year demand.
Defense market outlook
Asked: What is the scale of the opportunity in the defense portfolio, particularly regarding inventory replenishment?
Answer: Management expects defense sales to be up in 2027, driven by inventory replenishment and missile parts production, though they noted that final definitization of contracts and clarity on the defense budget are still pending.
Capital allocation and investment
Asked: How does the company balance high capital expenditure with shareholder returns?
Answer: Management stated they are investing heavily in capacity to support growth while maintaining a strong balance sheet. They highlighted that they have completed $2 billion in acquisitions this year, spent $0.5 billion on CapEx, and repurchased over $1 billion in shares.
What to watch before the next call
- Finalization of defense contracts and clarity on the 2027 defense budget.
- Progress on capacity expansion projects for both aerospace and IGT markets.
- Updates on aircraft build rates and engine shop visit schedules for 2027.
