Al Root

GE Vernova delivered better-than-expected first-quarter earnings and maintained full-year guidance, despite the impact of tariffs.

'Beat and maintain' is the new 'beat and raise' quarter that investors love.

Wednesday morning, GE Vernova reported earnings per share of 91 cents from sales of $8 billion. Wall Street was looking for earnings per share of 45 cents from sales of $7.6 billion.

Vernova was still part of General Electric at the end of March 2024. The separation was completed on April 2. The GE power business reported sales of $7.2 billion in the first quarter of last year.

GE Vernova stock rose 9.2% in premarket trading to $356, while S&P 500 and Dow Jones Industrial Average futures were up about 2.5% and 1.9%, respectively.

The gas power division generated $508 million in earnings before interest, taxes, depreciation, and amortization, or Ebitda, with profit margins up almost three percentage points year over year. Grid technologies generated $215 million in Ebitda with profit margins up more than seven percentage points.

GE Vernova's wind business still lost money. Ebitda landed at negative $146 million, a $27 million improvement year over year.

Looking ahead, management maintained full-year guidance. Sales in 2025 are forecast at $36 billion to $37 billion. Ebitda profit margins will be in the "high single digits." That implies 2025 Ebitda of about $2.9 billion to $3.3 billion. Wall Street currently projects $3.1 billion.

Guidance was maintained despite the impact of tariffs, which are a $400 million headwind, says CEO Scott Strazik. "We're continuing to work to mitigate that number, we're moving more parts to different locations, push, we're pushing more to customers, renegotiating terms with supplier, " he added. "It's an all of the above dynamic."

"We [expected] GE Vernova to be one of the few companies in our coverage to reiterate 2025 guidance," wrote BofA Securities analyst Andrew Obin in a preview report. He called tariff exposure manageable and expects Vernova to benefit from energy deregulation efforts. In fact, he said first-quarter numbers "may have investors dancing the electric boogie."

It looks as if he was right. Obin rates shares Buy and has a $485 price target for the stock.

Coming into Wednesday trading, GE Vernova stock was down about 1% this year. The small move belies recent volatility tied to tariffs, President Donald Trump's renewable energy policies, and Chinese AI competition. Shares have traded almost as high as $440 and as low as $270 so far this year. They closed Wednesday just above $326.

Options markets imply shares will move about 7%, up or down, following earnings. Shares have moved an average of about 3% up or down following the past three quarterly reports. Shares have risen twice and fallen once over that span.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 23, 2025 07:20 ET (11:20 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.