GE Vernova beats on profit with first standalone results, despite wind weakness

By Tomi Kilgore

Revenue rises, but less than expected as growth at Power and Electrification offset Wind's decline

Shares of GE Vernova Inc. got a nice boost in early trading Wednesday, after the power and renewable energy company reported second-quarter earnings that were well above expectations, while revenue missed amid weakness in the wind business.

The results were the first for the company since it completed its separation from GE Aerospace (GE) on April 2.

GE Vernova's stock (GEV) rallied 2.1% in premarket trading, to put it on track for a fourth straight gain.

The company swung to net income of $1.28 billion, or $4.65 a share, from a loss of $149 million, or 55 cents a share, in the same period a year ago. The FactSet consensus for net earnings per share was 84 cents.

Total revenue grew 1% to $8.204 billion, but was below the FactSet consensus of $8.259 billion.

Among the company's business segments, Power revenue rose 7.8% to $4.46 billion and Electrification revenue jumped 18.9% to $1.79 billion, but Wind revenue dropped 20.7% to $2.06 billion.

Orders increased 27% in Power to $4.98 billion, but fell 4% in Electrification to $4.82 billion and tumbled 44% in Wind to $2.16 billion.

The Wind business was hurt by the cancellation of a large offshore equipment order that was placed a year ago but canceled during the fourth quarter.

Power saw strength in gas power services and equipment, while Electrification witnessed strong demand for transformers, switchgears and circuit breakers.

Free cash flow was $821 million, compared with negative $447 million a year ago.

Looking ahead, the company said it expects revenue to trend toward the higher end of its guidance range of $34 billion to $35 billion, while the FactSet consensus is $34.58 billion.

The outlook for free cash flow was raised to $1.3 billion to $1.7 billion from $700 million to $1.1 billion.

The stock has run up 16.6% over the past three months through Tuesday, while the S&P 500 index has advanced 9.6%.

-Tomi Kilgore

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07-24-24 0726ET

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