AerCap's second quarter 2026 arrived with the world's largest aircraft lessor running what looks, on the surface, like a confusing quarter. Net income fell 42% from the prior-year quarter and diluted earnings per share dropped from $7.09 to $4.59. Read that as the headline and the stock at roughly $149 - up about 35% off its 52-week low - looks oddly expensive. Read the components and the quarter tells the opposite story. A year ago, AerCap booked a $973 million cash recovery from Russian airlines and insurers tied to aircraft lost in the Ukraine conflict. That one-time settlement inflated the prior-year base no ordinary quarter could match. This quarter booked just $28 million of recoveries. Strip that calendar effect and the second quarter was one of the strongest of the leasing cycle: adjusted net income of $811 million, or $5.14 a share, built on a record gain-on-sale tranche of $223 million at 1.7x book value, and book value per share of $119.21 - up roughly 16% year over year.
The cleanest signal is what management did with its own forecast. On July 29, AerCap raised full-year 2026 adjusted earnings per share guidance to approximately $16.80 - from the $12.00 to $13.00 range it had set just five months earlier. That is roughly a one-third step-up in guided earnings power, a raise of a scale that almost never appears four months into a fiscal year. The update includes first-half gains on sale and excludes any additional second-half gains, so it is not a full endorsement of the H1 sales pace repeating; but even measured against a $12.50 midpoint plus the roughly $3 per share of first-half gains on sale, the new number leaves room for an underlying beat and the benefit of a shrinking share count. AerCap repurchased $691 million of stock in the quarter and more than $1.4 billion year to date, and it is paying a $0.40 quarterly dividend. This is the story of the quarter: headline down, forecast up, and capital returned while leverage fell.