GE Vernova posted third-quarter results that surpassed Wall Street expectations, driven by a significant surge in new orders for its power generation and electrification equipment. Despite the strong performance and an optimistic outlook from its CEO, the company's stock experienced a notable decline in trading.
The energy equipment manufacturer reported impressive growth in both revenue and profitability, yet shares fell as investors appeared to take profits following a substantial year-to-date rally.
Key Takeaways
- GE Vernova's Q3 Ebitda reached $811 million on $10 billion in sales, exceeding analyst forecasts.
- New orders jumped 55% year-over-year to $14.6 billion, signaling strong future demand.
- The company announced plans to fully acquire electrical transformer business GE Prolec for $5.3 billion.
- Despite positive results, the stock fell 7.5% as investors cashed in on its 78% year-to-date gain.
Earnings Beat Fails to Lift Shares
GE Vernova announced third-quarter earnings before interest, taxes, depreciation, and amortization (Ebitda) of $811 million. This figure comfortably beat the Wall Street consensus of $787 million. Revenue for the quarter was $10 billion, also ahead of the projected $9.1 billion.
The results mark a significant improvement from the same period in 2024, when the company reported Ebitda of $243 million from $8.9 billion in sales. This demonstrates substantial year-over-year growth in profitability and operational scale.
However, the positive financial report did not translate into gains for the stock. After an initial jump to $609.54, shares reversed course and closed at $541.29, a decline of 7.5%. The sell-off occurred in a broader market where other high-flying, AI-related stocks also faced profit-taking.
By the Numbers: GE Vernova's Q3
- Ebitda: $811 million (vs. $243 million in Q3 2024)
- Sales: $10 billion (vs. $8.9 billion in Q3 2024)
- New Orders: $14.6 billion (up 55% year-over-year)
- Stock Performance: Down 7.5% post-announcement
Surge in Orders Signals Future Growth
A key highlight of the report was the remarkable strength in new orders, which totaled $14.6 billion, a 55% increase compared to the previous year. This figure significantly surpassed the $12.4 billion forecast by analysts at BofA Securities.
CEO Scott Strazik highlighted the momentum, noting the company added approximately $7 billion to its backlog in the last 90 days alone.
"The growth trajectory of the business is accelerating," Strazik stated. "We’re going into a growth phase…that will be stronger for longer."
Strazik also emphasized that the new contracts are more profitable than the orders currently being fulfilled, suggesting a positive outlook for future margins. To meet this rising demand, GE Vernova is expanding its capacity to produce gas power equipment from its current 15 gigawatts to around 20 gigawatts in 2026.
High Expectations and Market Dynamics
Coming into the earnings report, GE Vernova's stock had already climbed 78% in 2025. This impressive rally was fueled by investor enthusiasm for companies poised to benefit from the increased electricity demand driven by the artificial intelligence boom. The high valuation set a very high bar for the earnings report, and the subsequent stock drop suggests a classic case of "buy the rumor, sell the news" as investors locked in their gains.
Strategic Acquisition to Bolster Electrification
Alongside its earnings, GE Vernova revealed a strategic move to strengthen its fastest-growing division. The company announced it will acquire the remaining 50% of the GE Prolec electrical transformer business it does not already own from its partner, Mexico's Xignux.
The deal is valued at $5.3 billion and will be financed with cash and debt. GE Prolec is projected to generate $3 billion in sales in 2025 with an Ebitda profit margin of 25%. The acquisition, expected to close in 2026, will allow GE Vernova to fully consolidate Prolec's strong financial results.
This move enhances the company's Electrification segment, which is already performing exceptionally well. In the third quarter, the division's sales grew 35% to $2.6 billion, while orders skyrocketed 104% to $5.1 billion.
Profit Margins Improve Across the Board
GE Vernova's report also showed improving profitability across its business segments, a positive sign for its operational health.
- Gas Power: Ebitda margins increased to 13.3% from 11.9% a year ago.
- Electrification: Margins saw a substantial jump to 15.1% from 10.4%.
- Wind Power: While still negative, margins improved significantly to -2.3% from -11% in the prior year.
The company continues to face challenges in its offshore wind business and is not currently signing new orders in that sub-segment. However, the overall improvement in the Wind Power division is an encouraging development.
Despite the strong operational performance, GE Vernova maintained its full-year 2025 guidance for Ebitda of approximately $3.2 billion on sales between $36 billion and $37 billion. This guidance implies fourth-quarter Ebitda of around $1.2 billion, slightly below the $1.3 billion that analysts were projecting, which may have contributed to investor caution. For now, the market seems focused on the company's high valuation and the challenge of consistently exceeding lofty expectations.
