GE Vernova Inc. (GEV) shares are experiencing a dip in premarket trading following the release of the company’s third-quarter earnings report. While the report showcased a positive revenue performance, exceeding analyst expectations, the earnings per share (EPS) fell short of the consensus estimate.
Despite the mixed results, GE Vernova remains optimistic about its future prospects. The company reported revenue growth of 8% year-over-year, reaching $8.913 billion, driven by a 10% organic increase. This figure surpassed the consensus estimate of $8.783 billion. Notably, services strength across all segments contributed significantly to this positive revenue performance.
GE Vernova CEO Scott Strazik highlighted the company’s strong performance during the quarter, 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, marking a 17% organic increase fueled by a 28% organic growth in services across all segments. The company also saw notable equipment growth in its Power and Electrification sectors.
While revenue exceeded expectations, the company’s EPS for the quarter stood at a loss of $0.35, compared to a loss of $0.62 in the same period last year. This figure fell short of the EPS consensus of $0.32. The net loss for the quarter narrowed to $99 million from $185 million in the previous year.
GE Vernova’s adjusted EBITDA margin expanded by 20 basis points to 2.7%, reaching an adjusted EBITDA of $243 million, representing a year-over-year increase of 18.5%. However, on an organic basis, the adjusted EBITDA margin contracted by 70 basis points to 2.6%.
In its Power segment, revenue totaled $4.206 billion, marking an 8% year-over-year increase. Orders for the segment reached $5.202 billion, fueled by strong performance in Gas Power equipment and services, including 9 HA and 15 aeroderivative units. The Power segment also experienced a 29% organic growth in services.
The Wind segment generated revenue of $2.89 billion, remaining flat year-over-year. However, orders for the segment decreased by 19% year-over-year, reaching $1.747 billion. This decline was primarily attributed to lower Onshore Wind equipment orders outside of North America.
GE Vernova’s Electrification segment witnessed a 22% year-over-year increase in revenue, reaching $1.928 billion, driven by strong performance in Grid Solutions and Power Conversion. Orders for the segment grew by 17% year-over-year, reaching $2.51 billion.
The company’s cash flow from operating activities during the quarter totaled $1.127 billion, a significant improvement from the $233 million used in the same period last year. Free cash flow for the quarter reached $968 million. As of the end of the quarter, GE Vernova held a cash balance of $7.4 billion, an increase from the $5.8 billion balance recorded in the second quarter of 2024.
Looking ahead, GE Vernova reaffirmed its full-year guidance. The company expects revenue to trend towards the higher end of its $34 billion – $35 billion range, compared to the previously expected $34.93 billion. Furthermore, GE Vernova now expects free cash flow to trend towards the higher end of its $1.3 billion – $1.7 billion range.
Despite the mixed third-quarter results, GE Vernova’s reaffirmed guidance and continued strong performance in key segments suggest a positive outlook for the company’s future. Investors will be closely monitoring the company’s progress in the coming quarters.