What you need to know before GE Vernova announces its financial results

Key conclusions

GE Vernova will report financial results as a standalone company for the second time on Wednesday. Analysts expect the company to post a quarterly profit for the first time.
The power unit of former conglomerate General Electric reported a net loss in the first quarter as GE’s Vernova wind energy unit weighed on the company’s results.
Analysts say GE Vernova could be well-positioned to benefit from increased electricity demand over the next few years.

GE Vernova (GEV), the energy division of former conglomerate General Electric, is reporting earnings as an independent company for the second time Wednesday. Analysts are expecting GE Vernova to post a quarterly profit for the first time.

In its first quarterly report since GE completed its spin-off into three separate companies in April, GE Vernova reported a loss of $106 million on revenue of $7.26 billion as the company’s wind energy unit weighed on results.

Analysts are expecting GE Vernova to report $8.24 billion in revenue and $268.35 million in profit in the second quarter, according to estimates compiled by Visible Alpha. The company has been working to cut costs in its wind segment in recent quarters, as the division was the only one of GE Vernova’s three segments that did not report positive earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first quarter.

How GE Vernova Can Benefit from Higher Electricity Demand

Following the split, GE Vernova has been receiving positive comments and ratings from analysts as it has been seen as a potential beneficiary of the transition to renewable energy and the increased energy demand resulting from growing technology needs, such as data centers for artificial intelligence (AI) products.

““We remain bullish on the company’s market position as global electricity demand appears to be on the rise, supported by trends in manufacturing, electric vehicle sales, data centers and artificial intelligence,” CFRA Research analyst Daniel Rich wrote earlier this month, upgrading GE Vernova shares to “buy” and raising his target price on the stock to $210 from $162 previously.

Rich predicts GE’s Vernova wind business will become profitable in 2025, which will help improve the company’s margins.

The other two units of the former General Electric are also set to report earnings this month. GE Aerospace (GE) will report on Tuesday and GE HealthCare (GEHC) next week.

GE Vernova shares have gained about 19% since the company’s split from GE Aerospace was completed and closed at $166.76 on Monday.