Power And Electrification Propel GE Vernova's Q2 Performance, Wind Orders Lag, Guidance Raised

GE Vernova Inc. GEV reported second-quarter 2024 revenue growth of 1% year-over-year to $8.204 billion, missing the consensus of $8.259 billion.

Revenue was driven by strength in Electrification and Power and positive pricing in all segments. Services revenue grew 7% and 9% organically.

Orders totaling $11.8 billion decreased 7% organically, mainly due to the cancellation of a large Offshore Wind equipment order from the previous year. Service orders saw double-digit growth, driven by Power and Electrification.

EPS for the quarter stood at $4.65, compared to $(0.55) a year ago. Net income recovered to $1.28 billion from a loss of $149 million last year.

Adjusted EBITDA margin expanded by 390 bps to 6.4% and improved 320 bps to 7.2% on an organic basis, with Adjusted EBITDA of $524 million (+158% YoY).

Power revenue was $4.455 billion (+8% YoY), and Orders reached $4.975 billion (+27% YoY), led by Gas Power, with increased HA gas turbines and double-digit services growth, and Hydro Power equipment.

Wind revenue was $2.062 billion (-21% YoY), and Orders reached $2.16 billion (-44% YoY), reflecting the cancellation of a large Offshore Wind equipment order.

Electrification revenue was $1.79 billion (+19% YoY), and Orders declined 4% YoY to $4.823 billion. Strong demand continued for transformers, switchgear, and circuit breakers.

Cash from operating activities for the quarter totaled $978 million, compared to $288 million used a year ago. Free cash flow stood at $821 million.

In the second quarter of 2024, GE Vernova experienced two fatalities and updated its Life Saving Rules as fatality-free operations remain a top priority.

“Global electrification and decarbonization trends continue to drive demand for our products and services, and we are delivering value for our stakeholders. Our lean operating model is focused on improving safety, quality, delivery and cost as we execute for our customers and innovate breakthrough energy transition technologies. Given our strong first half performance and momentum in our Power and Electrification segments, we are raising our full-year 2024 guidance,” commented GE Vernova CEO Scott Strazik.

2024 Guidance: GE Vernova now expects revenue to trend towards the higher end of $34 billion-$35 billion versus $34.629 billion, and adjusted EBITDA margin of 5%-7%, up from the higher end of mid-single digits.

The company now expects free cash flow of $1.3 billion-$1.7 billion, up from $0.7 billion-$1.1 billion.

Price Action: GEV shares traded lower by 0.29% at $170.009 premarket at the last check Wednesday.