GE Vernova Q3 Earnings Report: Sales Growth Amid Mixed Results

GE Vernova Inc. (GEV) shares saw a decline in premarket trading following the release of the company's third-quarter earnings, which presented a mixed bag of results.

The company recorded an 8% rise in revenue year-over-year, totaling $8.913 billion, with organic growth at +10% year-over-year, surpassing the anticipated $8.783 billion.

GE Vernova's CEO, Scott Strazik, commented on the quarter's performance, stating, "GE Vernova had a solid third quarter, delivering double-digit orders and continued revenue growth with services strength across all segments, significant margin expansion in Power and Electrification, and substantial cash generation."

Orders for the quarter reached $9.4 billion, reflecting a 17% increase organically, fueled by a 28% growth in services across all segments and notable equipment growth in Power and Electrification.

However, the company reported a loss per share of $0.35 for this quarter, an improvement over the $0.62 loss recorded a year prior, but it fell short of the EPS consensus estimate of $0.32. The net loss for the quarter decreased to $99 million from a previous loss of $185 million a year ago.

In terms of profitability, the adjusted EBITDA margin slightly improved by 20 basis points to 2.7%, though it contracted by 70 basis points on an organic basis, resulting in adjusted EBITDA of $243 million, which marks an 18.5% increase year-over-year.

The Power segment generated revenue of $4.206 billion, up 8% year-over-year, while orders surged to $5.202 billion, up 28%, resulting predominantly from robust demand for Gas Power equipment and services.

Conversely, the Wind segment reported $2.89 billion in revenue, remaining flat compared to last year, as several orders were down 19% year-over-year to $1.747 billion, mainly due to reduced Onshore Wind equipment orders outside North America.

The Electrification segment enjoyed a 22% increase in revenue, reaching $1.928 billion, driven by strong performance in Grid Solutions and Power Conversion, with orders rising by 17% year-over-year to $2.51 billion.

Cash flow from operating activities witnessed significant growth, totaling $1.127 billion compared to just $233 million utilized in the same quarter last year. Additionally, free cash flow reached $968 million.

As of the end of the quarter, GE Vernova boasted a cash balance of $7.4 billion, an increase from $5.8 billion in the second quarter of 2024.

Future Outlook and Guidance

Looking ahead, GE Vernova has reaffirmed its guidance for 2024, projecting revenue to trend towards the higher end of the range of $34 billion to $35 billion, with an expectation of approximately $34.93 billion. The company also anticipates free cash flow to align with the upper end of the forecasted range of $1.3 billion to $1.7 billion.

Market Reaction

As a result of these earnings disclosures, GEV shares were down 4.49%, trading at $264.00 in premarket sessions.

Earnings, Revenue, Market