Earnings call transcript Q2 2023

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Operator

Good day, ladies and gentlemen, and welcome to General Electric Second Quarter 2023 Earnings Conference Call. [Operator Instructions].

My name is Liz, and I will be your conference coordinator today.

If you experience issues with the webcast slides refreshing where there appears to be delays in the slide advancement, please hit F5 on your keyboard to refresh.

As a reminder, this conference is being recorded.

to conference, program of Steve like host to Investor now today's for Winoker, would turn over the your Relations. I Vice President proceed. Please

Steven Winoker

Liz. assume Carolina join Dybeck call. GE XXXX September Aerospace and second will Ghai to us of Happe. Larry joined will GE’s Rahul also in CEO, CFO, by Q&A. Chairman role Thanks, earnings and Culp; CFO Welcome the GE's for I'm quarter CFO

world our statements the forward-looking making our best see view we we're the on of Some and them of are and as businesses based today.

elements and As the change our SEC described changes. in on filings our world website, those may as

Larry. to Over

Larry Culp

by Steve, and market demand strength a you growth have team with first from lean The GE and double-digit our more earnings our alone, transformation the turned now supported in year in In orders, thank surpassed profit focused full services morning strong results. half operating businesses. quarter good past another revenue, within everyone. cash, XXXX and

as strength the growing with today. Aerospace execute Vernova improving half, expectations on orders strengthening and year-to-date increased Based and margin guidance power. are ramp and year second continued customers, performance expansion profitability we full GE in continued GE for to record Renewable spin our in largely Energy the is is rapidly at we and on raising

the was At CFM’s is to flight efficient for drew a month. at COX define to lot evident fuel particularly RISE me future least our aims consumption by during meetings and program This Air engines. purpose of today, XX% and France to customers, bold a when it Aerospace businesses. with last and the shared picture compared most Big was tomorrow to investors. our reduce suppliers clear sense passion today's and excitement, Show, of emissions within as demonstrator vision I in GE progress, Paris

candor and the lean Vernova grow results. profitably operating discussed how on and transparency. Grid impact equal we our reviews, applying of team to Onshore We our these saw at opportunities real also challenges point where we drive GE focus with I for businesses Wind and by

We're by also where wind roofs through seeing reduced the assemble nearly multiple cell liens impact our in cycle facility XX% Saint-Nazaire, times the kaizens. team offshore to has in

still Aerospace by across Vernova. leaders revenue. industry large Day encouraged GE examples Vernova increasingly it's bases and about two early, we're while Vernova, revenue, day installed half as about So out I'm this GE and of represent of GE where like GE in, operating XX% services GE Aerospace with

we've to far customers. issues how investment we're In executing addition grade starts with team. it I their which technology to close our with And and us launches companies on as When the towards they're advancing We wrestling future understand how attractive the our reflect shapes businesses with, economics our year. always keep services performing, our roadmaps. next independent is come,

So of a we lot There's a to GE be year. rest big the this as you thank to about forward team. to the look global excited entire

to his member influential results take detail, Rahul an role of GE’s our fall. quickly has moment turn take additional over I Since to become joining through GE to leadership impactful Before in to last Carolina this let year, GE team. you as Aerospace and CFO me a Aerospace our he welcome it

our a job three operating last significant our improving through has companies. our sometime the with earnings foundation this in for been call. for grateful deeply XX September so She and and trusted building assuming Carolina’s early CFO the partner her And independent strategic We're final Rahul spin many X, approaching financial in results is contributions. deleveraging

personally, me behalf team So GE entire Carolina the on you. of for and Thank

Carolina Happe

finest a ambitious to has incredibly And for this to special done work to their lasting honor of team efforts. part be our transformation. an build I'm GE’s truly value. extraordinary teams the And proud ambitious thank It's Larry. you Thanks, of

Now growth up higher Tenet basis. organic equipment matrixes. delivered large HVDC all U.S. In to and projects second the This renewable. Orders which margin Grid headline I'll with quarter, significantly double-digit slide Onshore labor two we segments, an in orders Wind. turning across was all includes on to increased speak X, at XX% up and

strength. also doubled engine solid both Services up services Aerospace here, XX% the largely grew. with and is way orders. by up defense XX%, commercial with growth segments up. driven services Also in and as equipment delivers lead Aerospace nearly engine the was all increased lead Aerospace Revenue

productivity. by Wind also investment. led with mix was Grid Renewables margin basis price and partially improved and This offset grew Onshore by Adjusted volume, driven and by inflation XXX points pricing. expanded

deleveraging. Taken we together what driven in last segments year, profit adjusted EPS double meaningful all and was delivered $X.XX by growth nearly

flow Free million driven we double delivered by year, than $XXX growth. earnings last what cash was more

at assets seeing than contract reduced from payments offset half large billings progress for already and weekly second flows, growth by linear more This working and GE Looking implementing the and first sequential and progress. the given reduce utilization inventory the Vernova management capital some cash. of were we preparation and was quarter, revenue driven receivables cash deliveries,

half cash includes lower $X.X billion these capital billion first underscores free This working our flow than in year-over-year. Importantly, $X.X efforts XXXX. up

timing on a moment were Now driven primarily up by costs Adjusted non-repeat XXXX year-over-year benefits. corporate. of

million standalone for down to range. for structures year, $XXX And headcount XX% expenses continue year-to-date. in expect the the preparing cost We’re we financial with

We the GE prior strengthen and to simplify of Vernova. the foundations to business launches also Aerospace and continue GE

financing action stake, will outstanding we legacy exposure today the announced our quarter, call we And our to in remainder the and reduce took monetized that costs. reducing GE September, of liabilities. further balance we our to simplifying Preferred Healthcare Stock and we GE This partially sheet

has settlement charge discontinued our Polish some to other mortgage we been adoption time, subject that along litigation runoff of with As disclosed portfolio, billion ongoing for We the operations. have program $X Bank with Polish approved recorded associated of we banks. a in and BPH, a

spin balances half, which of the Bank GE compared times progress year ago. cash three required our Importantly, BPH cash EPS current the no very we're incremental first adjusted are Overall, contributions with more charge are than and connection adequate. a includes from pleased with up to in at

includes from $X.X to guide the the expecting X.X low to EPS, $X And range and revenue and $X.XX single digit of $X.XX of strength up to at flow high full digits. cash now up adjusted So for of $X.X for to double the for billion $X.X now a X.X that from for to Vernova, free improvement GE Aerospace, of $X.XX we range in growth billion up we're operating given GE $X.X year, profit. billion billion billion. finally, billion the

note, happy Larry. to And you on that back

Larry Culp

you. thank Carolina,

the for both propulsion, industry solutions commercial and many Air at you As defense services. across saw and showcased Paris of GE systems Show, Aerospace leading

Our combat ramp. our teams fleet with and services of Today large for XX,XXX and endless rotorcraft and customers are airlines in airframers, delivering source engines as partnering drive we're XX,XXX, engines. both to they stability by predictability commercial growing and young

we're next engines. of our Tomorrow and optimizing generation For growing

example, And engines for and Air, to business team for historic our Air our while secured quarter the Aeronautics Hindustan Indian This defense major MOU Limited fighters, jet Force. X more. with Jet deals a Riyadh signed commercial fighter produce jet with

RISE, technologies next sustainable For the aviation hybrid future, and electrics, developing fuels. like generation we're

seeing of greater result those to action, empower focus. intensity, to and closest our a and As I'm embed lean the efforts discipline

to and increase challenges efforts every while like the Sustaining supply including quarter, in For implement lead we're by and June a help times. lean chain us called deliveries sequential reduction plan lean a a delivery. XX% XX% using discussed second XX% from persist, poll tool this in example, inflation part engine as improve we in improvement in for TXXX

strength This pre-COVID market, growth at with up XX% levels. with almost double rapid have departures defense. Orders to XX% in evident and the at returned Looking Revenue commercial equipment results. in growing rate. services services our quarterly are up the was was

adjustments XX points inflation nearly organically. productivity unfavorable Volume commercial with $XXX improved engines and Margins and last year. again, services offset particularly Once the mix, XX%. non-repeated million XX% increased Profit were revenue pricing of basis close contract was contracted positive investments growth. robust by to or net margin

sequentially. LEAP grew and over XX% for revenue on up year. this over track year-over-year Engines Commercial LEAP with We're XX% XX% deliveries deliveries XXXX

the expect than year to XXXX but we normalize the in expected half the this for engine ratio remaining in LEAP was XXXX deliveries full second roughly line with As spare higher

external increased and up Internal Commercial visits over were Services over XX% shop XX%. XX%. revenue also grew parts spare over

year, engines to XX%. the XXs grow and above commercial to now we grow services mid-to-high revenue expect For commercial

units Defense with XX% improved half, we output and this quarter we're Through at delivering first the this engine up significant year. growth. increased over more on for than digit least Orders revenue growth double-digit doubled, growth high single track year-over-year. deliver

cost is the the innovating U.S. air constantly well. this we're tested the and needs ahead, watching decades here decade. of Senate importance is National the defense to warfighter come. XAXXX Authorization in pleased Appropriations U.S. House Defense the the by to and week. effective This maintains Act, for ensure recognized the only it the option the has house including ready this to as engine program Looking We’ll superiority bill. in meet of funding be legislation most closely engine the considers We're Committee as this

raising to expect expectations. Based at billion teens to operating to and And flow with be profit our year-over-year growth free midpoint. half in we're the to $X.X $X up cash strength, billion, line revenue stronger high first on we $X.X our profit XX% to roughly even year-over-year billion increased

Moving Vernova. to GE

use encouraged along see driven by need resilient And team's XXXX. for security. more continue as by with operations, in they sustainable, tailwinds the a toward Lean to long driving significant strengthen energy We term growth we're affordable, progress the to energy inflection

record demand projects, Even more continued were renewables Grid improvement. Market XX%. quarter by drove orders led projects. Grid large This excluding over orders demonstrated HVDC up these two with

order, our forecast a also March offshore large at As our which expected, in investor recognized we was U.S. conference. included backlog

and month equipment America's are threefold. led this by increase the cell incentives Revenue date. strong was year-over-year orders of across and higher Wind tripled the deliveries as again, Wind revenue largest Grid, grew with developers, than June, we significantly Onshore grow year. American We organically more offshore serve production XX% many driven and to growing IRA highest helping both North North equipment by in

consecutive for Importantly, profit productivity quarter and primarily second by and at sequentially improvements driven Onshore Grid. price year-over-year improved the and

the into each business, Going onshore deeper at continued. progress

enhancing the of and product select our underwriting impact fewer on rigor seeing we're markets with offerings. focusing First,

Second, price inflation. to manage driving we're

forward. past on in the current As U.S. are will here drive going in than margins, profitability improved the we've margins four seen especially quarters higher new coming equipment help This orders

July of expect enhancement we Next, as halfway we're end. fleet be And almost we're program. improving through to and complete year done XX% by more reliability than our

curve roughly year-over-year. on And cost we headcount learning work continues our projects. our times the Haliade-X improving as through offshore to initial rationalization onshore we're Our XX% customers with and for reducing cycle down deliver

expansion grew remains and quarter the and on price And finally, margin full in grid, for double the businesses to all profitable productivity. track top digits with profitable this was in volume, from line significant year. Grade turn

to forecast the Onshore growth ahead, full raising revenue Looking second single driven we're half we're our digits. sequential profit And Grid. some and in high improvement renewables year expecting by Wind

providing earnings power, continues Turning decarbonisation results time flow future and GE deliver to at to and reliable critical multiyear Vernova. And growth for at support the power our continue. solid efforts same cash

and the planning Just potential three we’ll using work province this reactors licensing announced BWRX-XXX of small the process together modular there for month our design. on Ontario new more

due utilization grew at base generates to Orders had quarter. higher Looking deliveries. error future digits gas at turbine from this provides strength single grow however the we Services continue a and derivative grew to largely market, low Revenue power declined with high services transactional GE slightly stable services. the now Grid This single gas growth. and shipment digit to timing. power rate load HA

by margin Power services. half units and mid-single inflation. and more productivity digits on continued organically outage margins than and in duty price, revenue Overall volume gas heavy growth offset first contractual power higher led grew the delivered power expanded profit expansion,

year we even the continue single revenue XXXX. growth quarter given versus now we and expect profit second to better expect For performance to power's digit low our be

midpoint. forecast Vernova, a year, growth. almost revenue this GE improvement mid-single $XXX improving to negative million through digit at and we're year-over-year together of million million expect now power. And also guidance We're for our Taking $XXX to both raising $XXX the profit renewables them by an negative our a

free to of more but momentum, our continue with cash and slightly Overall flow. progress to flat expect to be we're We improved pleased done. remains course

focus missions wrap the that on by to future of our world. the anchored flight, decarbonizing about and where X, to success we well our we're and for to So and two slide market we're businesses headed electrifying inventing excited customers and the a as confident up delivered GE Vernova positioned service I'm innovative leaders. matter Aerospace, We're GE world. are strong half where

Steve with that.

Q&A. to go Let's

Steven Winoker

Larry. Thanks

as one your and Before the people question many so ask get please queue we in open line. open I'd analysts we the can ask line to everyone to Liz, as the consider fellow possible.

Operator

Kahyaoglu [Operator Jefferies. Sheila question Instructions] first Our from with comes

Sheila Kahyaoglu

for to at ask I is half, implied everyone. year-to-date year Thank look are profitability. Aero XX.X%. the When XX.X% we guidance first you. morning margins full margins about Aerospace and Good want the

of good ahead coming So market So the through, was the what second of the in are improvement release the is XX% contract commentary the in the second contraction release -- given for your your of dynamics half commentary sequential strength, slightly in margins shipped prior that you've the in expectation HX, year? efficiencies of are happens prior the in what lease half?

Larry Culp

reasons on think that's begin one you. wanted is with you're in here, here to to It's accelerate excellent an largely we equipment us him as I dynamic No, morning. services. thank play Rahul? the there I we a Sheila, for question jump this have referenced, of on. in revenues spot And But Rahul here. think to vis-à-vis, as mix

Rahul Ghai

Larry, morning thanks Sheila. Yes

know with quarter XX% let go growth. engines double to back second referenced run first up you was really more strong for continuing was And year-over-year me on the be up Defense first digit up XX%, Commercial growth how you service than a his organic we half. expansion. margin recovering which just good remarks as So had XX% Larry profit than more growth. XX% with said to plus in the revenue

quarter the to expected than had back And April. better what we all going way the was

the And at more the importantly expansion. us the profit $X to the up of quarter year looked margin So raise full the it billion is for we with the year. but midpoint guide gave confidence the at year-over-year as our

a that's positive change as So well.

about And the year revenue about million the full raising with $XXX million increase. to midpoint relative $XXX of we're April profit by the at of guide

is a about commercial from increase even as the the And that's guide through. commercial OE of we coming to raising in though XX% OE our most from So incremental revenue XXs. that approximately drop XX are is mid-to-high outlook happening

and business the as the helping better doing growth well. execution spare on is the is So improvement parts in

commercial half, half. Now which between of second to your first And probably of -- on XX% there sequential shipments, services. being the view is of as increasing a get spare well, the is commercial coming of And from percentage most half, second half first key and coming installed year, the growth year. reversal a within we the commercial OE, that's as half OE, happening installs as what sequential driver Last is was second between growth second total question half into up we is from half dynamic year. commercial of saw last with first the the of the the

So to it's why margin. year. We're $X the margin and good a step down billion year. But in for sequential a you're expand going profit grow to really seeing be again, that's about going

Operator

from comes next question Our Bank of Andrew Obin line the of America. with

Andrew Obin

in And are you year-over-year more and orders offshore, stay I'll Offshore, morning. was favorable that Good now if out folks dynamic stock. on thought favorable. there the the dynamic industry as the could commentary not covering given you interestingly, that seems of are yes. because Power it Oh, is at illustrious in noted the pricing the that orders. lane, analysts pulling comment offshore you I were offshore not also looking overall

are people away So pulling contracts. from

color on more And you. great quarter. would great. So be Thank offshore

Larry Culp

you, Andrew. Thank

was in that we from some no respect out order. lock shared that just in rest to assured. You're we Cincinnati our to March with that. what eyes, that I could the There were something Again, pleased down we were in do really with offshore to coming. regard. had and knew we needed illustrious say surprise But we in that details you

the what prepare have flow business. Saint-Nazaire begin for customers We sides have. of we next referenced in still Now, we're and as they I to backlog, terms decade. direct this Atlantic building for the doing backlog discussions this have We in number certainly of production to out this this think we're on Offshore a with us, nascent had that read both

end transition optimistic I but Offshore to talked going some some renewable we over the the the powered as we were course which ways the be to various of pressure has that about with a of about that at know play there. about delays, I think certainly day are the the think coast role there we're -- weekend potential Wind. think Offshore in energy sources, to

want we build making do profitable what business market. up the is Onshore. Really mean, to has a I respectable pleased a of with that we’re in that slice progress

selectivity, from a year a terms in quality I out a in that is the and of pricing think ago improvement we of a cost backlog our everything the said from perspective. the from playing

to issues often of our it of and XX again have job think the playbook about going nice that sure quality XX% working talked are they're than the last the really the better quarter how making third I team we've charge took that through just triggered here power base we a that run done is the cost year we ago. in was months some

we you see So in appreciate U.S. the where more think you the critical transition. Onshore. churn backdrop lot maybe modernization in a be And really but here will together, don't against Grid, a how but execution the can energy to similar really increasingly with Grid, I people in about so pleased talk grid that Europe put

so renewables in GE to at amongst wind as they the positioned angles being three we that play in we're like attack, say Aerospace many of play got vital gas we've So way Vernova. one continuing offshore role a

Operator

of JPMorgan. Seth Seifman Our question with next the comes from line

Seth Seifman

good Hey, morning.

regard think And forward up talk measure I to were forward. in technical if those spare just in about like a in then to square things So something headwinds. in can spare's model I it about really in can about maybe to that and question, bit if think the the spares we I extent rate this parts to could I I we it you talked it growth low there role mix a expect digit when kind try to you think single margin and I and the the half of ask just the strong the kind think queue if Aerospace what so which just going how growth look think but like offset play pricing XX% little with about for to it's day, going rate of quarter, -- per how you wanted the and second and a

Rahul Ghai

let So question debt. on the with me start pricing first

price in terms a are So the growth earnings commercial. quarter again, the to year. I we price/cost in defense of be positive to driver expect the both continues and think And positive across and be positive price/cost for both

that the and trends good, similar So last to to continue saw what year. we is be

So really to we in change inflation that are are cover no how the terms we incremental pricing feeling in business. driving the of

of good, drivers the And would I part right, our terms part you in I good sales, yes, more really mean, growth really three XX%. it say of growth. Now, part than spare spare spare the the was are sales in quarter large

the are increase, that discipline the but just we that the about, we place. which extracting with of the price is is we are it putting not making spoke in increases out also that are driving are we increases that we it most just price First, the the sure business so

was as us second well. customer The the favorable makes

the last China especially spare part I is you drive second the was because helped is and back that the in in shutdown China. go third to would XXXX, And year, weak to say sales. So, really of third if quarter

the year-over-year in helped China. in were quarter trends the growth by compare a second So, weak

the for came of really Now, little you we in recall, bit that fourth to shift the reopening first going if China the as half the in get quarter. is because a year, get to quarter ready back strongly second into dynamic

of the second our part impact spare basis. in on the to going that’s growth So, year-on-year the year half

overall, with in a quarter the So, slower pleased half growth think expect a rate. are I of although on year-over-year at how second really the parts year spare continued and good we’re trending, basis the growth of

Operator

a Mitchell from Julian of line comes question next with Our Barclays.

Julian Mitchell

or of renewables Grid, maybe How offshore offsetting losses second of about just out at rates on or to entry the mix Hi, had so for maybe a it's but the the maybe you through or do kind year-on-year Onshore strong, getting and we're wider. I good if half incremental better perhaps, sequentially sometime of offshore sort those looking terms sort strong Maybe of lot I is then dynamics. morning. because narrowing, step and were incrementals, not focus year, us maybe very XXXX. the next there's something? of about just the help revenue into a of wanted renewables of talk particularly sort that's as business. a And thinking uplift that some losses And function we pause guess that think linear it we're in

Larry Culp

Julian, that let me, you. let for me frame

contours early that Wind. that I XXXX along Again, sequential will, is what in really this year, to is sometime was think see the for in need year. we've we us said Vernova the And you've what think got all as that Onshore have exactly improvement to go that right. you next battleground we I get ready if really,

are And all product terms a, perspective, some of a saw restructuring our all, our that's better has to shipped improved from customers of again, let cost from pricing, a a know being a today, selectivity, from function a quality market alone delivering we just conditions. a We I sequential the higher function underway of performance, of backlog that in reflected we think that's been a in conditions and that function some improvement, there. of that's

guide the run year. to us them but And improvements I'd next running want operating continues. see I the teams we half ready that really this are And gives reviews that that And suggest beyond back the for part it. that see really business well numbers, getting our confidence here, also what me both you bodes those also that what of in for in that

a them for been similar We rollout we've We've -- that there contributor strong turn be running the the want been Grid. Power goal. and playbook last having couple years that's to profitable, a here. at the Again, in of not

point another it's progress. think I of proof

a negate revenue work with does that Wind initial thus, progress and effect recognition as some hold we as and that Offshore in of revenues to takes Offshore mix the there uptick losses right, through backlog. that improving the begin You're the

But we of start-up was Offshore knew the of that part Wind.

see in second because progress progress half in or of Offshore going we're perhaps able progress. very Offshore Onshore bit effect. at Offshore the we It's Wind, mean, of loss year, do your But we and what the the sequential we muted Wind renewables momentum the given quarter. the that the good Grid, in given to roughly progress the about know So eyes I a was in to be feel an next we're Vernova at given making large. at

Rahul Ghai

two of Vernova the just volume add about the the of midpoint. strength said, to profit and that by productivity. the from and and coming power, the look revenue power performance business into the are quarter in mainly XXXX, raises both half from $XXX year, backlog, so from raising Grid renewables services just in So And improvement you About with and it's to and about for Onshore in Grid, and of because we profit Onshore the a from renewables both driven contributing to if is the million improving of what thirds Larry second margins third guidance with at both second of race. in

sequential year-over-year basis. on in progress and a both businesses good So

Operator

Our next Research. Robert comes Melius with question Spingarn from

Robert Spingarn

Morning, everyone.

Larry Culp

morning, Good Rob.

Robert Spingarn

an to desire that on the of openly they've perhaps about to also not And add side, Larry, development family. the when product said a AXXX-XXX high a talked matter the is has Airbus a if. level. and second maybe little engine But

would you given family? that so compete on feel to to the directly And against that, AXXX X, the get the do MAX aircraft the need LEAP-XB

Larry Culp

are topic out coverage product how the going critical that well your Rob, the and captured here their narrow-body I on strategy play really thought with. all X wrestling specific we're to that airframers multi-series questions

strategy. probably own relative technology their RISE, you in for evolve that they as customers airframer how our own map we're matter, together i.e., respect, with road our road map and can both can to deep work product we product of As and

evolve critical AXXX-XXX, think comments Guillaume the have So to specifically the to matter we'll all that that as we keep obviously, We'll in ahead. team. our portfolio, the conversation our I decades and private. on want product we But be his with platforms

Operator

Our of next Capital question comes with Deane from RBC Markets. a Dray line

Deane Dray

Good everyone. you. morning, Thank

Larry Culp

Good Deane. morning,

Deane Dray

to of the Carolina all First best. you thank wish all, you and

Carolina Happe

Thank you Deane.

Deane Dray

Larry, Hey, I standardized renewable talk modifications were that were that But variability you booked that booked been versus of you readout customer too a steering in the profitability. that and within the bit range these orders customers these in know orders? about can offering. more Did generalize of a talked before, orders about had terms much a problem to

Larry Culp

P&L me sure are. earlier. that mentioned today having too last in really types should in to we of will These the that that. make effect conservative positive see effort have that forward quarters with Part of I a than that, estimation the is more opportunities also more is standardized Thanks selectivity team conservative on we've seeing frankly, to into probably the will say that. pursue, I'd the order be coupled that book we is what several cost say far driving are But Dean, asking for when the estimates backlog. over We'll frankly, that those a, play position not that in that addition more this offerings. out the terms that the time. future. also how growing we know for just and cost we we the about our I anticipate deliver in of would that we of are tried do, of

all we the put to we business. have improvement that together, that across addition you in put in the the structure that So quality sharply cost reduced

profitability particularly Onshore back half, the and an got we've the why optimism do that's Wind, think about I XXXX. we in

Operator

Jeffrey with Our next Sprague Partners. question Vertical comes from Research

Jeffrey Sprague

morning, Good you. everyone. Thank

Larry Culp

morning, good Jeff. Hey

Jeffrey Sprague

kind for good Hey, flow, hey, thoughts on get of the language, right what Thank to trajectory deposits the coming year. better has renewables flow orders in if share be stuck fact, on free XXXX to just how the you just you'd profitability, wondering same up that your should I'm outlook view flat inside attached to and renewables some but maybe playing the of given free to out? have cash anything about the improving, like looks if love trajectory morning, with if with for And apparently, of follow decent improved that, cash you.

Rahul Ghai

So XXXX let me Jeff, first. with start,

from for year, So year, right, to payments find -- minus is contract of progress year $XXX-ish progress you'll last the well, of current here, Wind coming renewables and the doing we especially charge with construct, the good flattish offshore the way Grid's earnings payments. earnings, full last huge and growth on assets playing it's that it's Onshore million with but the positive absence on getting from in progress what the took in are out. kind by offset

think overall, for full kind as that So renewables, year. of flat year-over-year of

the assets And billings. slightly to revenue be cash you earnings year-over-year. as but the from Power free happens, are we then these pressured the fact down the that revenue on because go positive growth exceeds could Again, is it's cash, getting contract books with contract if because the burn through Power, assets sitting our

side. the So happening that's on Power what's

impact business. driving The happening. for is temporary growth, good revenue revenue but It's a are growth free The cash. So outages on good it's negative the helping. has

into year-over-year the as year but do into we'll improvement get towards business sequential we expect end Now we obviously, provide next the Vernova as more year, we XXXX, strong guidance get overall. in of

Operator

from question next comes Our with Wolfe Research. Nigel Coe

Nigel Coe

congratulations luck. good and Carolina And

up net both XQ Bank, moving $X that on earnings some asset of dive on So that, value Thanks. charge no and free into if And litigation down at writing that for remaining maybe is just look Polish top cash does billion the pieces business, cash? in that this just and we clean And there? the maybe of flow. just could wondered the just

Larry Culp

Nigel, I Poland, your didn't fully on quarter so question. third Yes, follow

Poland. back come that. me with let's let So to start But

So And we've taking forward direction reserve, meaningful cash liabilities. in losses. working that future there's our the simplify approving program. in adequate Carolina that significantly legacy the incremental reduces balances. exposure been a this a her to to And GE from prior remarks, has no said And bank prepared to settlement as it's as step We're spend. cash

point, this the and legacy it's So as get as situation clean to a really we as us, liabilities. all we But step as is revolving. good the feel simplify good forward we can at up behind this obviously, we much

Nigel Coe

guys, XQ overall? XQ guidance the just about And how we are thinking just question, guys,

Larry Culp

Yes.

we Aerospace third strong single-digit $X.XX And sequential quarter profit EPS then about in see Power range to both expect in quarter on in third revenue quarter, the the up the year in go X growth on to and we're will to growth points EPS profit, if we even the the high look with Xx what did the we a that at And we're that's last $X.XX that in and $X.XX, you pretty charge. providing, Renewables. margins $X.XX So of growth of on providing and Power. exclude if range to X about expect

a improvement So from it's that. significant

as will cash the then in flat D&A and given could to up free Onshore margin see reduction slightly given outage sequentially, slightly then questions, of all And I from kind second earnings of back free sequential profit half in with to the prior the going down the be said, expect to rates And way Aerospace, the is performance. cash. there for coming majority And improvement activity we headwind. OE. And will and be offsetting quarter, improvements, Power, first to the but continue up given Wind growth the commercial capital Grid half good the and third do working the Renewables quarter increase

Operator

next from Kaplowitz Citi. question with Andrew comes Our

Andrew Kaplowitz

do more you're revenue up orders Could than defense color how or guys. doubling the your you you least the Carolina, defense everyone, digit about to thanks quarters high said and growth? morning really Good you spent now that you at corner growth over for extended you think for into single profitability talked your was and and I contribution have know more margin give ‘XX? in of growth business, for turned growth XX%. an defense little us its GE seeing next we into the This runway this about some couple And but Defense help. improvement

Larry Culp

Andy, maybe I'll start.

several chain last As talked about everyone the certainly prepared I through the the our not challenges and remarks, demand we fundamental Defense quarters, we is we've indicated to throughput Defense. our think applied is. that And arena, have supply challenge talks in and about in

the issues quarter that we've numbers. think so especially particular have us, some I first had challenged with

is platforms recently, only of have by own think not a where really TXXX, we host I what material but encouraged with better. flow facilities the we're with seen our in our

key in number of place. a We that take improving to yields operations allows that flow are

a And part, PFEP, about we that every helps implement how bit us little talked a deliveries. plan for turn improved pull and

high able really do in our trying past as to to cost, some of we here. And also only continue against follow due, turn; better early also signals extent you'd single-digit not and are beginning external to but think some that targeting our we're a has, So see margin had but see need supply Rahul, supply in good. when it. turn, accrues to drive seen, from we'll line improvements productively, what to able level, we've that to more clear. price not the out And work that we're output labor we a that to do the to anything material there? just and, in certainly cash base our long add will need only number not top improvements, our but productivity that, as goodness perspective. from internal this impact We're all I and that that and I base, traditional think, But

Rahul Ghai

No, Larry, think it. I covered you

year. to recovery demand kind seeing the see second for half second delivery. happening on -- the I think and good it's us good in puts the back year-over-year the full improvement And in we're track quarter in good of

year. in half we So good of a the half back expect the

Operator

comes question line Joe the of from with Goldman Our next Ritchie Sachs.

Joseph Ritchie

Hey throughout help guys you the good Carolina years. the for morning and thank all

Carolina Happe

Joe. Thanks you. Thank

Joseph Ritchie

you're I'm And pre-spend? mortgage to you the about cleaning I congrats there. hurdles then all progress with spend? other you capital balance here can from allocation Polish just any the progress any you of from early said know but -- my the thinking forward, today. redemption, this are really the announcement how So you up sheet question curious just point making, on pref well, the XXXX, see just that color us on give that the

Larry Culp

not that that are isn't necessarily our being still focused of that readiness, very talked We've playbook this take think, separation talked are really in exactly respect That where about about teams We've spend July. be really Joe, had, function their there that because early on the I real now sometime launching the and the I would and that we a morning much our Vernova in we'll work allocation to the the any is the rerunning then. want performance, and with between here year. change case would capital decisions of perspective today. say next to middle success HealthCare, are with

of us look there business is results right? the first we're half think what I encouraged improvement as So really do, what Still proud to winning we great we we've second can forward define seen negative what and think think again, about. is none feel sequential in I loss half outlook. There's work and Onshore by a Grid, in I way said operating quite in But we've by business. be seen have we that the we'll all of. And the

of launch the thank for you, at AerCap X -- to allow like very each to the HealthCare, respective remains position shape while contours allocation, be monetization capital Aerospace much these a a of business. initiatives X make a well, even companies. some we're And successful with to you've policy all specific from together, standup sheet on allocation Job all fit the to going then of the stake, preps, you Boards to mentioned respect each likewise progress us the balance just in perspective you the With of put capital continue of the but that Vernova seen and not of only

what over little may successful several boring spin Aerospace. quarters, next that focused in the Vernova and and of here GE standup perhaps term, hyper GE team successful that on is our this a the near So is the of be is but overarching priority

Steven Winoker

Liz, we last have quick one question. time for

Operator

come of the UBS. question This will Chris Snyder from line with

Christopher Snyder

I time. appreciate the

Revenue up up the what's single-digit you to jive the well in the maybe want XXX% driving implying year revenue a with to So for to year. And orders Can full in down like for XX% low calling I I just doesn't ask the of seem year. fall first back guess singles Because half was it's of on guidance half. with that? growth, renewables. the high about over the you. Thank first talk it half

Rahul Ghai

will and I ‘XX. So those year, help -- don't this of orders out the even much ‘XX kind that's mean, play orders those revenues, mainly Chris. over

which growth It's -- is first of a what project and you and see those projects how getting timing. just play and growth the So basically between out. projects executed are half half second just question the

the renewables, it's good on better guidance again, about but on -- growth. feel raising So revenue progress, year,

obviously good the and So strong, and very, the progress. And it's ‘XX that are we helps -- and orders orders that very ‘XX.

Steven Winoker

final Rahul. Thanks, any Larry, comment?

Larry Culp

strong you. Thanks as more time thank and first close company. No, launch been GE investment XXXX. our say ahead frankly, our today Vernova. and of we in for Steve, I to and everybody And GE your in to Aerospace I've both support would your path half simply a confident never prepare

Operator

today's concludes This ladies Thank conference. and you, you gentlemen. Thank for participating.

You may now disconnect.

General Electric (GE) 25 Jul 232023 Q2 Earnings call transcript