GE Vernova beats profit estimates, warns weakness in wind business to persist

By Katha Kalia

Oct 22 (Reuters) - GE Vernova GEV.N warned on Wednesday that extended weakness in its onshore wind due to permit delays and tariff uncertainty is likely to weigh on its 2026 revenue from the business, triggering a 9% drop in the power equipment maker's shares.

The caution on onshore comes as the wind division has grappled with challenges in its offshore segment from turbine failures and project delays.

GE Vernova expects revenue in the unit, which also provides blades and related services, to decline in the high-single digits this year, compared with its previous forecast of a mid-single-digit drop.

The segment's third-quarter revenue fell 8.4% to $2.65 billion, dragged by the absence of a $500 million benefit from a previously canceled offshore wind project recorded last year.

"In the U.S., onshore equipment orders remain soft as we shared in September," Chief Financial Officer Ken Parks said on a call with analysts.

President Donald Trump in July said rapid adoption of solar and wind power has made U.S. electricity unstable and expensive, justifying his bid to end most subsidies for renewable energy.

U.S. utilities are the world's largest importers of grid-scale transformers and battery systems that are made primarily in China, South Korea and Japan, which means they face substantial tariff-related price increases.

Shares of the company, spun off from General Electric GE.N, were down 4.5% in morning trading. They have surged more than 345% since the split, largely on strong performance in its power equipment and electrification segments.

AI POWERS QUARTERLY BEAT

Robust equipment orders and rising U.S. power demand from data centers supporting artificial intelligence workloads helped the company top third-quarter profit expectations.

The company reported $14.6 billion in orders in the quarter, a 55% increase organically, led by demand for grid equipment and steam and gas turbines.

GE Vernova said on Tuesday it would acquire the remaining 50% stake in transformer manufacturer Prolec GE for $5.28 billion, strengthening its North American grid equipment business.

Its electrification unit reported a core profit of $393 million, up 95.5% from a year ago, while the power unit posted $645 million, a 29% rise.

The company reported an adjusted profit of $1.67 per share, beating expectations of $1.62, according to data compiled by LSEG.

GE Vernova expects 2025 tariff impact to remain near the low end of its $300 million to $400 million forecast.