Key Takeaways
- GE Vernova reports earnings as a standalone company for the second time Wednesday, with analysts expecting the company to post its first quarterly profit.
- The energy unit of the former General Electric conglomerate reported a net loss in the first quarter, as GE Vernova’s wind division dragged on the company’s results.
- Analysts said GE Vernova could be strongly positioned to benefit from higher demand for electricity over the next several years.
GE Vernova (GEV), the energy-focused division of the former General Electric conglomerate, reports earnings as an independent company for the second time Wednesday, with analysts expecting GE Vernova to post its first quarterly profit.
In its first quarterly report since the former GE completed its split into three separate companies in April, GE Vernova reported a loss of $106 million on $7.26 billion in revenue, as the company’s wind division dragged on results.
For the second quarter, analysts expect GE Vernova to report $8.24 billion in revenue, with $268.35 million in profits, according to estimates compiled by Visible Alpha. The company has worked to reduce costs in its wind energy segment in recent quarters, as the division was the only one of GE Vernova’s three segments that did not post positive earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first quarter.
How GE Vernova Could Benefit From Higher Electricity Demand
GE Vernova has received positive comments and upgrades from analysts since the split, as the company has been identified as a potential beneficiary of the move towards renewable energy and increased energy demand from growing tech needs like data centers for artificial intelligence (AI) products.
“We remain bullish on the company’s market positioning as global power demand appears to be rising, supported by trends in manufacturing, EV sales, data centers, and artificial intelligence,” CFRA Research analyst Daniel Rich wrote earlier this month, upgrading GE Vernova to “buy” and raising the stock’s price target to $210 from $162 previously.
Rich anticipates GE Vernova’s wind division becoming profitable in 2025, which would help the company’s margins improve.
The other two divisions of the former General Electric also report earnings this month, with GE Aerospace (GE) reporting its results Tuesday and GE HealthCare (GEHC) reporting next week.
GE Vernova shares have gained about 19% since the company completed its split from GE Aerospace, at $166.76 as of Monday’s close.