German engine maker MTU Aero Engines (MTXGn.DE) beat second-quarter revenue and earnings forecasts on Thursday and raised its 2026 free cash flow outlook, as robust demand for geared turbofan (GTF) engine maintenance drove growth in its aftermarket business.
The earnings beat was driven largely by MTU's maintenance, repair and overhaul (MRO) division, where revenue rose to 1.75 billion euros ($2.00 billion), well above analysts' consensus of 1.48 billion euros, as GTF-related shop visits continued to fuel demand.
Geared turbofan MRO accounted for around 46% of commercial maintenance in the first half of 2026, the company said in a press release.
MTU raised its 2026 cash conversion rate target to 50%-60% from 45%-55%, citing stronger-than-expected cash generation after first-half free cash flow climbed 39% to 294 million euros.
"We want to use these funds to support our organic growth with shares in new programs in both the OEM and MRO business. Going forward, we will also focus on shareholder returns and potential M&A activities," MTU CEO Johannes Bussmann said.
Despite the strong results, profitability in MTU's maintenance business came under pressure, with the MRO earnings before interest and taxes (EBIT) margin falling to 8.0% from 9.1% a year earlier as the company ramped up capacity and handled a higher share of geared turbofan overhaul work.
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