GE Vernova Resumes Turbine Installations

(Reuters) – GE Vernova announced on Tuesday it has resumed the installation of turbines at two offshore wind farms that faced equipment failures this year. However, the company’s CEO, Scott Strazik, expressed caution regarding the outlook for the struggling sector.

In an investor presentation in New York, Strazik indicated that GE Vernova is not taking new orders for offshore wind turbines and anticipates more losses in its wind segment by 2025. "We aren't going to chase bad deals," he stated, emphasizing the expectation of minimal growth in onshore wind over the next three years.

The wind division of GE Vernova has incurred hundreds of millions of dollars in losses this year due to delays in major offshore projects in the U.S. and the U.K., primarily due to turbine accidents. Construction at the Vineyard Wind project off Massachusetts had been halted for months because of a notable blade failure, with a company investigation revealing that workers at a Quebec factory had hurried quality control processes.

Moreover, the offshore segment is grappling with cost inflation and supply chain issues. Strazik noted an increase in customer interest in the company’s nuclear and electrical grid software offerings. Following a three-way split from General Electric (NYSE: GE) this year, GE Vernova is prioritizing cost reduction and profitability.

The company expects a mid-single-digit decline in revenue by 2025, contrasting with a forecast of flat revenue for this year. The wind segment's weakness has been mitigated by strong demand for GE Vernova’s gas turbines and electrical grid equipment driven by increasing power needs from data centers. Strazik noted, "I can't think of a time that the gas business has had more fun than they're having right now."

GE Vernova anticipates securing 20 gigawatts (GW) of gas equipment orders this year, up from 11 GW last year. By 2027, the production of gas turbines is expected to increase to 80 per year from the current 55.

The company projects higher revenues for next year, estimating between $36 billion and $37 billion, compared to the upper range of $34 billion to $35 billion in 2024. Additionally, free cash flow is forecasted to rise to between $2 billion and $2.5 billion in 2025, compared to the expected range of $1.3 billion to $1.7 billion for this year.

GE Vernova also announced a $6 billion share buyback and a new quarterly dividend of 25 cents per share.