GENERAL ELECTRIC CO: revenue falls for the first time in two years, yet the company raises its full-year guidance

16 июля GENERAL ELECTRIC CO раскрыла результаты за второй квартал 2026 года. Выручка снизилась на 9,3% год к году до 10 000 млн долл., что стало первым падением за два года, однако EBITDA выросла на 6,8% до 2 784 млн долл., а чистая прибыль – на 16,9% до 2 370 млн долл. Акции после публикации потеряли 4,1%, но с учётом повышенного прогноза менеджмента и оценки по модели портала (+6% к текущей цене) бумага выглядит скорее привлекательной.

Key takeaways

— Second-quarter revenue fell 9.3% – the first decline in two years, yet EBITDA rose 6.8%

— EBITDA margin widened from 23.7% to 27.8% on profit growth in both segments

— Operating cash flow reached $3,195 million – the highest level in eight quarters

— Net debt declined to $8,176 million, with Net Debt/EBITDA LTM at 0.83

— The company raised its 2026 guidance for adjusted revenue, operating profit, and free cash flow

— Shares fell 4.1% after the report, but the portal's model implies 6% upside

Attractiveness

Key figures, USD bn

Second-quarter revenue fell 9.3% – the first decline in two years, yet EBITDA rose 6.8%

In the second quarter of 2026, GENERAL ELECTRIC CO's revenue amounted to $10,000 million, down 9.3% year-on-year. This is the first decline in two years: previous quarters showed solid growth – from +10.9% in Q1 2025 to +24.7% in Q1 2026. The decline was driven by lower revenue from the insurance business, which the company reports separately.

Despite the revenue drop, EBITDA rose 6.8% to $2,784 million, and net profit increased 16.9% to $2,370 million. Profit growth was driven by operational efficiency and a favorable revenue mix: the share of high-margin services in commercial aircraft engines continues to rise.

EBITDA margin widened from 23.7% to 27.8% on profit growth in both segments

In Q2 2026, EBITDA margin reached 27.8%, compared with 23.7% a year earlier. The margin expansion reflects profit growing faster than revenue: operating profit rose 7.2% (to $2,560 million) while revenue declined.

In the Commercial Engines & Services segment, revenue grew 27% to $9,731 million, and operating profit rose 20% to $2,657 million. In Defense & Propulsion Technologies, revenue increased 16% to $3,443 million, and operating profit rose 18% to $475 million. Profit growth in both segments was driven by higher volumes and prices, partially offset by inflation and investments.

Operating cash flow reached $3,195 million – the highest level in eight quarters

In Q2 2026, operating cash flow reached $3,195 million – the highest level in the last eight quarters. For comparison, in Q2 2025 the figure was $2,246 million, and the average over the previous four quarters was around $2,200 million.

The increase in cash flow reflects improved working capital management and higher profit. Capital expenditures remained at $335 million, allowing the company to generate substantial free cash flow, which management forecasts at $8.9–9.2 billion for 2026.

Net debt declined to $8,176 million, with Net Debt/EBITDA LTM at 0.83

At the end of Q2 2026, GENERAL ELECTRIC CO's net debt stood at $8,176 million, down $2.2 billion from the previous reporting date and $1.0 billion lower than a year ago. The reduction was driven by strong operating cash flow.

The ratio of net debt to EBITDA for the trailing twelve months is 0.83 – a moderate level of financial leverage that does not constrain the company's investment opportunities. Interest expenses in Q2 amounted to $215 million, covered more than tenfold by operating profit.

The company raised its 2026 guidance for adjusted revenue, operating profit, and free cash flow

GENERAL ELECTRIC CO's management raised its 2026 guidance across all key metrics. Adjusted revenue growth is now expected at 'high single digits' (up from 'mid-single digits'), operating profit is expected at $10.55–10.75 billion (previously $9.85–10.25 billion), and free cash flow at $8.9–9.2 billion (previously $8.0–8.4 billion).

The guidance raise is based on strong first-half results, including 30% revenue growth in the Commercial Engines & Services segment and a 31% increase in engine deliveries. Specifically, the company expects CES revenue to grow about 20% in 2026, with segment operating profit reaching $10.25–10.35 billion.

Shares fell 4.1% after the report, but the portal's model implies 6% upside

After the earnings release on July 16, GENERAL ELECTRIC CO's shares fell 4.1%, and by September 4 they had lost another 6.4% from the pre-release close. The decline likely reflects investor disappointment with the revenue drop, despite positive profit drivers.

Nevertheless, according to the portal's model, based on EBITDA growth and a target multiple, the shares have +6% upside from the current price. The current EV/EBITDA LTM multiple (32.9) is significantly above the three-year average (20.5), indicating a high valuation, but justified by sustained profit growth and improved guidance.

Valuation on the latest reported figures

Bottom line

In Q2 2026, GENERAL ELECTRIC CO demonstrated strong operational dynamics: EBITDA and net profit grew at double-digit rates, cash flow reached a record level, and debt declined. The company raised its full-year guidance, confirming management's confidence in the business's resilience. However, the revenue decline is the first sign of a possible slowdown, and the market reacted with falling quotes. At the current price, the share trades at a premium to its own history, but the portal's model upside (+6%) and improved guidance make the stock rather attractive. The key question is whether the company can restore revenue growth in the coming quarters without sacrificing margin.