Stock of Ge Vernova Heads for a Record as Revenue Misses, but Outlook Remains Positive

Shares of GE Vernova Inc. surged to new record highs in early Wednesday trading, despite the company falling short of revenue expectations for the fourth quarter. The power and renewable energy firm, however, maintained its 2025 outlook, citing a "strong finish to 2024."

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Chief Executive Scott Strazik highlighted strength in the Power and Electrification sectors, along with improvements in Wind, while also expanding its equipment backlog with better margins. This positive momentum helped the company maintain confidence in its growth prospects for the upcoming year.

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Initially, the stock had dropped after the results were announced, falling as much as 6.7% in premarket trading, before rebounding to climb 1.1%, pushing toward a sixth consecutive record close.

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GE Vernova reported a 20.5% year-over-year increase in total orders across its business units, reaching a record $13.37 billion. This surge was driven by a 118.2% increase in Electrification orders and a 20.2% rise in Power orders, which more than offset a 41.2% decline in Wind orders.

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The company explained that the drop in Wind orders was mainly due to a tough comparison with 2023, when a significant U.S. onshore wind order was booked in the same quarter.

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The results came just a day after President Trump announced a pause on the leasing and permitting of wind projects, adding some uncertainty to the wind energy market.

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In terms of total revenue, GE Vernova saw a 5.1% increase, reaching $10.56 billion, although this fell short of the consensus, which had forecasted $10.70 billion. Breaking down the segments: Wind revenue rose 20.2% to $3.11 billion, surpassing the $3.02 billion consensus.

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Despite a sharp decline in Wind orders, this segment was the only one to exceed revenue expectations. Conversely, Power revenue dropped by 2.9% to $5.43 billion, missing the $5.63 billion forecast, while Electrification revenue grew by 11% to $2.18 billion, slightly under the $2.21 billion expectation.

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Net income saw a significant increase, rising to $484 million, or $1.73 per share, compared to $197 million, or 72 cents per share, in the same period a year earlier. However, this still missed the consensus estimate for earnings per share, which was $2.30. Free cash flow also took a hit, falling to $572 million from $1.65 billion, just below the expected $580.4 million.

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Despite these misses on revenue and profit, GE Vernova reaffirmed its guidance for 2025. The company still expects full-year revenue between $36 billion and $37 billion, up from the $34.94 billion anticipated for 2024. This projected growth is expected to come primarily from Power and Electrification, which should offset the decline in Wind.

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The outlook for free cash flow in 2025 was also reiterated, with expectations of $2.0 billion to $2.5 billion.

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Chief Financial Officer Ken Parks commented on the results, stating, "We had a strong finish to 2024 as we execute our strategy to deliver disciplined revenue growth with increased profitability and positive cash generation."

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This report marks just the fourth quarterly update for GE Vernova since its spinoff from the original General Electric Co., now known as GE Aerospace, in April 2024.

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Over the past three months leading up to Tuesday, GE Vernova's stock has surged by 50.5%, outperforming the broader S&P 500 index, which gained 3.4% during the same period.

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