GE Vernova Q3 Earnings Report: Revenue Growth Amid Earnings Miss

GE Vernova Inc. (NYSE: GEV) saw its shares decline in premarket trading following a mixed set of results for the third quarter. The company reported its revenue increased by 8% year-over-year, reaching $8.913 billion, and even better, a 10% organic growth rate, surpassing the market consensus expectation of $8.783 billion.

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

The total orders for the quarter hit $9.4 billion, reflecting a 17% organic growth, primarily fueled by a 28% increase in services and notable equipment advances in Power and Electrification segments.

However, the company's earnings were not as strong, with a reported loss per share of $0.35 for the quarter, a decrease from a $0.62 loss in the same period last year. This figure fell short of the consensus EPS estimate of $0.32. Notably, the net loss narrowed to $99 million from a $185 million loss in the prior year.

Adjusted EBITDA for the quarter was recorded at $243 million, which is an 18.5% year-over-year increase. This resulted in an expanded adjusted EBITDA margin of 2.7%, although on an organic basis, it contracted by 70 basis points to 2.6%.

Breaking down the revenue, the Power segment generated $4.206 billion, marking an 8% growth year-over-year, while total orders in this segment soared by 28% to $5.202 billion. This was driven largely by Gas Power equipment and services, including the sale of 9 HA and 15 aeroderivative units, alongside a notable 29% organic growth in services.

On the Wind side, revenues remained stable at $2.89 billion year-over-year, but orders fell by 19% to $1.747 billion, which reflects weak demand for Onshore Wind equipment outside North America.

The Electrification segment performed well, with revenues increasing by 22% to $1.928 billion, primarily propelled by strong performance in Grid Solutions and Power Conversion. Orders in this segment climbed 17% year-over-year to $2.51 billion.

Cash flow figures were striking, with operating cash flows totaling $1.127 billion for the quarter, a significant improvement over the $233 million used in the same period last year. Free cash flow amounted to $968 million, supporting a positive outlook.

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

2024 Forecast Reaffirmed

Looking ahead, GE Vernova has reaffirmed its guidance for 2024, expecting to align revenue towards the higher end of $34 billion to $35 billion, compared to last year's result of $34.93 billion. The company also adjusted its expectations for free cash flow, now projecting it towards the higher end of the range between $1.3 billion and $1.7 billion.

Market Response

Following this earnings report, GEV shares saw a decrease of 4.49%, trading at $264.00 in premarket activity.

Earnings, Finance, Revenue