Q3 Results: GE Vernova Falls Short On Offshore Wind, Hits Onshore Targets

GE Vernova

GE Vernova Inc., a US-based wind energy company, secured $1.7 billion in orders in the third quarter ending September 30, 2024. The company reported a 19% organic decrease, attributing the drop to lower Onshore Wind equipment orders outside of North America. GE Vernova generated $2.9 billion in revenue, down 1% organically. Losses increased due to incremental Offshore Wind contract issues, partially driven by a settlement agreement regarding a previously canceled offshore project. Meanwhile, the Onshore Wind segment delivered its most profitable quarter in several years.

GE Vernova’s third-quarter orders totaled $9.4 billion, reflecting a 17% organic increase, driven by 28% organic services growth across all segments and equipment growth in Power and Electrification. Company’s margins expanded in Power, Electrification, and Onshore Wind, though they were partially offset by incremental Offshore Wind contract losses. Cash flow improved by approximately $0.9 billion, primarily due to strong working capital management.

“In the third quarter, we increased our already solid cash balance to $7.4 billion from substantial positive free cash flow and proceeds from the value-accretive sale of a stake in a business in India.” said GE Vernova CFO Ken Parks. “With strong performance in Power and Electrification offsetting additional losses in Wind this quarter, we are reaffirming our GE Vernova 2024 financial guidance. We look forward to providing an update on strategic capital allocation and our multi-year financial outlook at our investor update event in December.”

“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,” said GE Vernova CEO Scott Strazik. “We continued to leverage lean practices to drive operational improvements across safety, quality, delivery, and cost, and released our first GE Vernova sustainability report, outlining our progress in helping to electrify and decarbonize the world. It is an exciting time in our industry, and I appreciate the work our team is doing to serve growing customer demand for energy transition technologies and services while creating value for our stakeholders.”

In India despite the potential, Offshore wind energy capacity suffers from similar issues as companies in Europe. The common issues faced by these companies are such as high capital costs. The offshore wind energy cost is roughly four times greater than onshore projects, due to the need for high-maintenance steel structures, underwater transmission networks, and additional port infrastructure. With government support and subsidies, offshore wind tariffs could decrease by 28 to 30 percent, potentially reaching INR 6 to INR 6.50 per kWh, though this is still 80 percent higher than onshore wind tariffs of INR 3.30 to INR 3.40 per kWh.