GE Vernova Earnings Call Transcript, October 28, 2026 (GEV)

From Investing.com Oct. 28:

GE Vernova beat Wall Street expectations in the third quarter of 2026, reporting adjusted earnings of $4.81 a share on revenue of $12.64 billion, above forecasts for $4.00 a share and $12 billion in sales. The stock rose 0.55% in premarket trading to $900, after closing at $895.08 the prior day. The company also lifted its full-year outlook, citing strong order growth, a larger backlog and higher cash generation across its power and electrification businesses.

Key Takeaways

• GE Vernova reported adjusted EPS of $4.81, ahead of the $4.00 forecast by 20.25%.
• Revenue reached $12.64 billion, topping expectations by 5.33%.
• Orders jumped 96% from a year earlier to $29.3 billion, with a book-to-bill ratio above 2.0x.
• Backlog expanded to about $200 billion from $176 billion in the prior quarter.
• The company raised full-year guidance for revenue, adjusted EBITDA margin and free cash flow.
• Shares rose modestly in premarket trading, suggesting investors welcomed the results but were not surprised by the strength.

Company Performance
GE Vernova said the quarter reflected broad momentum across its portfolio, especially in power and electrification. Revenue rose 18% from a year earlier, while adjusted EBITDA climbed 123% to $1.9 billion. The company said its adjusted EBITDA margin improved by 690 basis points, helped by better pricing, stronger execution and a higher mix of profitable work.

The company’s order book also strengthened sharply. Total orders reached $29.3 billion, nearly doubling from a year ago. Equipment backlog rose to $104 billion, while services backlog increased to $93 billion. Management said the business is benefiting from a long-term investment cycle tied to grid upgrades, data centers, electrification and power demand growth.

The results point to a company that is gaining scale and pricing power. Power margins reached 21.4% in the quarter, and management said the business is now shipping equipment at better prices after earlier order wins. Electrification also posted strong growth, while wind turned profitable in the quarter despite a softer U.S. market.

Financial Highlights

• Revenue: $12.64 billion, up 18% year over year.
• Adjusted EPS: $4.81, versus $4.00 expected.
• Adjusted EBITDA: $1.9 billion, up 123% year over year.
• Adjusted EBITDA margin: up 690 basis points year over year.
• Orders: $29.3 billion, up 96% year over year.
• Book-to-bill: above 2.0x.
• Backlog: about $200 billion, up from $176 billion.
• Equipment backlog: $104 billion, up about $16 billion sequentially and 92% year over year.
• Services backlog: $93 billion, up $11 billion sequentially.
• Free cash flow: $5.4 billion, up $4.7 billion from a year earlier.

Earnings vs. Forecast
GE Vernova beat expectations on both the top and bottom lines. Adjusted EPS of $4.81 was $0.81 above the consensus estimate of $4.00, a 20.25% surprise. Revenue of $12.64 billion came in $640 million above the $12 billion forecast, a 5.33% beat.

The size of the earnings beat was larger than the revenue beat, which suggests stronger margins and operating leverage. That fits with the company’s report of higher pricing, better factory productivity and a more profitable mix of equipment and services.

The beat also looks meaningful in the context of the company’s recent trend. GE Vernova has been emphasizing margin expansion, backlog growth and cash generation, and this quarter showed all three moving in the right direction at once. The result was not just a modest upside surprise; it was a quarter that reinforced the company’s long-term growth story....

***stock price discussion written by AI omitted*** 

...Outlook & Guidance
GE Vernova raised its full-year 2026 guidance. The company now expects revenue of $46.5 billion to $47.5 billion, adjusted EBITDA margin of 13.5% to 14.5%, and free cash flow of $16 billion to $17 billion.

Management also raised segment guidance for Power. Organic revenue growth is now expected to be 19% to 21%, up from 18% to 20%, and the EBITDA margin range was lifted by 200 basis points to 19% to 21%. The company said it expects to exit the year with mid-20s margins in Power.

Electrification guidance was maintained, with revenue expected to be $14.5 billion to $15 billion and margins trending toward the high end of the 18% to 20% range. Wind guidance was revised to reflect a smaller decline in organic revenue, now expected to be down mid-single digits rather than low double digits.

Management also pointed to several strategic initiatives. The company announced the Trench Group acquisition, which it said will strengthen its high-voltage grid business and be accretive on day one. GE Vernova also said it has doubled its stock buyback program to $20 billion and continues to invest heavily in R&D and capital spending.

Executive Commentary
Chief Executive Scott Strazik said the company’s growth is accelerating across its core business and new products. “With almost $30 billion in new orders and an expansion of our backlog from $176 billion to approximately $200 billion in 3Q, we continue to see strong pull from customers for the solutions we offer,” he said.

Strazik also pointed to the company’s improving Power margins. “Power reached 21% EBITDA margins in what is historically our weakest margin quarter,” he said, adding that the result reflected the first quarter of 5 gigawatts of gas power equipment shipments at better prices.

On the Trench deal, Strazik said the acquisition will strengthen the company’s electrification platform and support future growth. He described it as “strategically compelling and attractive” and said it fits the company’s capital allocation priorities.

Chief Financial Officer Ken Parks said Trench has a strong revenue base and long-term growth potential. He said the business has about $5 billion in combined backlog and framework agreements and expects mid-teens annual revenue growth from 2026 to 2028.

Risks and Challenges

• Wind remains a weak spot: The U.S. onshore market is still soft, and permitting delays and tariff uncertainty could slow orders.
• Cash flow may be volatile: Some of the quarter’s strong free cash flow came from working capital benefits tied to down payments and reservations.
• Heavy investment needs: The company plans to raise R&D and capital spending, which could weigh on near-term free cash flow.
• Acquisition execution risk: The Trench purchase adds integration and financing complexity, even if management expects it to be accretive.
• High expectations: With the stock already near the top of its 52-week range, future gains may depend on continued execution.

Q&A
Analysts focused on margins, pricing, backlog growth and the outlook for services. Questions centered on whether the strong Power margin performance marks the start of a longer improvement cycle, and management said the second half of 2026 is the right base for 2027 comparisons.

Several analysts asked about the Trench acquisition, including its customer mix, supply chain role and possible synergies. Management said Trench is strategically important because it gives GE Vernova more control over key components used in transformers and grid equipment.

Questions also touched on gas turbine demand and aeroderivative bookings. Management said demand remains strong, but some customers are booking further out because of limited supply. Analysts asked about the wind business as well, and management said it is pleased with the return to profitability but still sees strategic questions ahead for 2027 and beyond.

Another focus was services growth. Management said services should continue to expand at a healthy pace and become a larger, high-margin part of the business over time. The company also said its long-term services target may prove conservative when it updates investors at a future capital markets day.

Full transcript - GE Vernova LLC (GEV) Q3 2026:....

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The stock is changing hands at $891.46, down $3.62 (0.40%).

Earlier: 

Earnings: GE Vernova Beats Top And Bottom, Raises; Stock Higher Premarket (GEV)

We'll have more after the conference call. At the moment the stock is up $16.49 (+1.84%) adding to yesterday's $40.46 (+4.73%) gain. $912.01 last.

It's a tough-to-please crowd, we'll see how they react.