GE Vernova Can Mitigate Tariff And Inflation Concerns After Strong Q1, Sticks To Annual Outlook
GE Vernova Inc. (NYSE:GEV) shares are trading higher on Wednesday following the company's stronger-than-expected first-quarter 2025 results.
The company reported revenue growth of 11% year-over-year to $8.03 billion and +15% organically, beating the consensus of $7.54 billion.
GE Vernova reported orders totaling $10.2 billion, reflecting an 8% YoY organic growth.
This increase was primarily driven by a 16% rise in service orders and a significant 43% surge in Power equipment orders.
Earnings per share for the quarter were 91 cents, compared to a loss per share of 47 cents, which beat the consensus of 53 cents.
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Adjusted EBITDA margin expanded by 310 bps to 5.7% and by 170 bps to 5.4% on an organic basis, with Adjusted EBITDA of $457 million (+141.8% YoY).
Power Segment: Revenue was $4.423 billion (+10% YoY), and Orders reached $6.247 billion (+24% YoY), driven by Gas Power equipment and services. Segment EBITDA reached $508 million, and margins were up 290 bps to 11.5%.
Wind Segment: Orders decreased 43% to $0.6 billion, mainly due to lower Onshore Wind equipment in the U.S. Revenues rose 13% to $1.8 billion, driven by higher Onshore Wind deliveries and pricing, despite continued losses in the Offshore Wind segment. Segment EBITDA was $(0.1) billion, improving by 270 bps.
Electrification Segment: Orders totaled $3.4 billion, down 3% organically, due to a large HVDC order in Q1 2024. Revenues increased 14%, or 18% organically, to $1.9 billion, driven by growth in Grid Solutions. Segment EBITDA was $0.2 billion, with an 11.4% margin, up 740 bps.
Operating cash flow for the quarter totaled $1.16 billion, and free cash flow was $975 million. At the end of the quarter, the cash balance was $8.1 billion.
'We generated positive free cash flow in the first quarter, a milestone for the GE Vernova businesses, reflecting strong down payments and working capital management resulting in further improvement in linearity,' said GE Vernova CFO Ken Parks.
2025 Guidance: GE Vernova reaffirms its 2025 financial outlook, projecting revenue of $36-$37 billion versus the consensus of $37.73 billion, a high-single-digit adjusted EBITDA margin, and free cash flow of $2.0-$2.5 billion.
Segment guidance includes:
Power: Mid-single digit organic revenue growth and 13%-14% segment EBITDA margin.
Wind: Mid-single digit decline in organic revenue and $200-$400 million in segment EBITDA losses.
Electrification: Mid-to-high-teens organic revenue growth and 11%-13% segment EBITDA margin.
The company stated that this guidance accounts for tariffs and inflation, estimated at $300-$400 million, net of mitigating actions.
Price Action: GEV shares traded higher by 4.93% at $342.15 at the last check on Wednesday.
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