GE Vernova falls after EPS miss, even as orders nearly double

GE Vernova shares fell Wednesday after second-quarter profit came in below Wall Street’s estimate, showing how quickly investors can punish an earnings miss even when demand is strong. The cleaner read for long-term power demand came from orders, backlog and cash flow, all of which rose sharply in the quarter.

Revenue for the quarter ended June 30 climbed about 22% from a year earlier to $11.1 billion, above the $10.7 billion expected by analysts surveyed by LSEG. Earnings per share, or EPS, rose 33% to $2.47, but missed the LSEG consensus estimate of $3.01. EPS is the portion of a company’s profit assigned to each share of stock.

CNBC’s Investing Club said GE Vernova shares were down 8% Wednesday as investors focused on the profit miss. The club also noted the stock was still up nearly 55% for the year despite the decline.

Orders point to strong demand

GE Vernova reported $24.2 billion in second-quarter orders, up 95% on a reported basis and 88% organically. Organic growth strips out currency effects and other items to show the performance of the existing business more clearly.

The company’s backlog reached $176 billion. Backlog is work the company has booked but has not yet completed. GE Vernova also reported a book-to-bill ratio above 2 for the quarter, meaning new orders were more than twice the amount of revenue recognized from fulfilled work.

Management said on the earnings call that gas power is “mostly sold out through 2030,” and expects more than half of 2031 production slots to be sold by the end of this year, according to CNBC’s Investing Club. CEO Scott Strazik said the company remains on pace to reach a $200 billion backlog in 2027.

Free cash flow rose more than 2,500% from a year earlier to $5.12 billion, well above the $1.2 billion estimate cited by CNBC’s Investing Club. Free cash flow is cash left after a company pays for operations and capital spending. Management attributed the gain to larger customer down payments and slot reservations in the Power business.

Power and electrification carry the quarter

Power segment revenue rose 14% to $5.48 billion, below the $5.6 billion estimate cited by CNBC’s Investing Club. Segment orders increased 134% organically, and the Gas Power backlog rose to 53 gigawatts, with another 63 gigawatts in slot reservation agreements.

Strazik said the electric power industry is in the early phase of a “multi-decade growth opportunity” and pointed to “strong global demand” for GE Vernova equipment and services. The company said first-half 2026 equipment orders priced more than 20% above fourth-quarter 2025 equipment orders.

Electrification revenue rose 68%, or 29% organically, to $3.64 billion, ahead of the $3.44 billion estimate cited by CNBC’s Investing Club. Strazik said the segment is seeing demand from electricity growth, grid stability needs, national security concerns and data centers. The company booked $2.7 billion of data center orders in Electrification during the quarter, bringing first-half data center orders in the segment to more than $5 billion.

Wind remained the weak spot. Revenue fell 10% to just over $2 billion, though it beat expectations cited by CNBC’s Investing Club. The segment posted negative EBITDA of $252 million. EBITDA means earnings before interest, taxes, depreciation and amortization, a common measure of operating profitability.

Guidance moves higher

GE Vernova raised its 2026 revenue outlook to $45.5 billion to $46.5 billion, up from its prior forecast of $44.5 billion to $45.5 billion and above the $45.45 billion estimate from LSEG. The company kept its adjusted EBITDA margin target at 12% to 14%, compared with a 13.7% estimate from FactSet.

The company also lifted its full-year free cash flow forecast to $11.5 billion to $12.5 billion, compared with its previous range of $6.5 billion to $7.5 billion. For the third quarter, management expects Power organic revenue growth of 17% to 19%, Electrification revenue of $3.8 billion to $4 billion and Wind revenue to decline by a low-double-digit percentage.

This story draws on original reporting from CNBC.