Safran SASAF
▲ PositiveDemandrelevance
Safran raised full-year outlook after strong first-half results driven by strong demand for jet engine services and spare parts.
Impact on stocks 2
Defense & Geopolitical Fragmentation▲ · 1 stocks
Safran SAAerospace & Aviation▲ · 1 stocks
GE AerospaceGE
▲ PositiveDemandrelevance
GE Aerospace also raised its forecasts on strong aftermarket demand, mentioned as a comparable positive trend.
Theme Impact 2
Off-coverage companies
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S&P 500 Q3 Earnings Expected to Rise 24%, Eighth Straight Double-Digit Quarter
S&P 500 earnings are expected to increase by +24% from the same period last year in the third quarter, the 8th straight quarter of double-digit earnings growth for the index, according to Zacks Investment Research. Earnings are expected to be above the year-earlier level for 14 of the 16 Zacks sectors, with 5 sectors expected to enjoy double-digit growth: Aerospace up +159.3%, Energy up +111.9%, Tech up +41.9%, Basic Materials up +31.2%, and Transportation up +15.1%. The Conglomerates sector is the only one expected to have lower earnings in Q3 relative to the same period last year, down 35.4%, while Consumer Staples earnings are expected to be flat. Excluding the Energy sector, Q3 earnings growth for the S&P 500 drops to +20% from +24%, and excluding the Tech sector, growth for the rest of the index drops to +14.4%. Nvidia's Q3 earnings are expected to increase +90% year-over-year on +91.2% higher revenues, while Micron's year-over-year earnings and revenue growth rates are expected to be +938% and +348.6%, respectively, and Tech sector earnings growth gets cut by slightly more than half once contributions from Nvidia and Micron are excluded. The Q3 earnings season will get the spotlight when the big banks report on October 13th, but the reporting cycle actually got underway with the September 10th quarterly releases from Oracle and Adobe, followed by homebuilder Lennar as the third S&P 500 member to report such Q3 results, with an additional six index members on deck this week including Costco, AutoZone and Darden. Total Q3 earnings for the three S&P 500 members that have reported results already are up +22.6% from the same period last year on +14.9% higher revenues, with 33.3% beating EPS estimates and 66.7% besting revenue estimates.
Honeywell CEO Calls GE's $11.75 Billion CPP Deal Positive for Aerospace
Honeywell Aerospace CEO Jim Currier called GE Aerospace's planned $11.75 billion acquisition of Consolidated Precision Products positive for the industry overall, while noting Honeywell does not directly compete with CPP because the parts it sources differ from GE's. CPP supplies roughly a quarter of GE's casting requirements, and GE expects the business to generate about $2 billion of revenue in 2027. Currier said Honeywell could bring additional outsourced capabilities back in-house through smaller, complementary acquisitions, after the company cut its 2026 organic sales-growth outlook to 4%-5% from 7%-9% and quadrupled spending on multi-sourcing and in-sourcing initiatives this year. Honeywell deployed skilled workers into supplier factories, which Currier said helped increase production 30% year over year during the preceding 30-45 days. In the second quarter, sales rose 5% to $4.52 billion, but adjusted EPS fell 32% to $1.87, with supply constraints and an unfavorable mix weighing on profitability.
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Boeing CEO Says No 200-Plane China Order, Flags 737 Wing Bottleneck
Boeing CEO Kelly Ortberg tempered expectations for a large China aircraft order, clarifying that the company did not receive a roughly 200-plane order earlier this year and that Chinese officials instead indicated plans to move forward with purchases that he expects to emerge incrementally and be announced by individual airlines. Speaking at Morgan Stanley's 14th Annual Laguna Conference, Ortberg said Boeing has reached a 737 production rate of 47 aircraft per month but has yet to stabilize at that level, with wing production in Renton remaining the primary constraint even as the broader supply chain, including engines, is in good shape. Boeing expects 737 MAX 10 certification very soon, with flight testing complete and only documentation and regulatory review remaining; the MAX 10 represents roughly 30% of Boeing's 737 backlog. The 777X faces another hurdle, as Boeing awaits completion of GE Aerospace's engine mid-seal certification plan before it can begin ETOPS testing, with some testing possibly spilling into next year, though the company continues to target 2027 deliveries. Engine deliveries are also slowing Boeing's effort to raise 787 production from eight to 10 aircraft per month, with the required engine delivery performance now expected closer to year-end, and a potential SPEEA strike could effectively halt the 777X certification program and disrupt 737 production before the current contract expires Oct. 6. CFO Jay Malave reaffirmed Boeing's 2026 free cash flow forecast of $1 billion to $3 billion, with about $2 billion as the framework, but said slower-than-expected 737 and 787 production ramps through year-end make results above the midpoint less likely than previously expected.