General Electric Co. executives said the company's offshore wind business expects to record a roughly $1 billion loss for 2023, though its onshore wind segment turned a profit in the third quarter thanks to a nearly 40% increase in North American equipment orders.

"Next year, we expect offshore will have similar losses, but substantially improved cash performance," GE Chairman and CEO Larry Culp said Oct. 24 during the company's third-quarter earnings conference call.

The company's power and renewable energy divisions, to be spun off in 2024 as GE Vernova, are still expected to become profitable that year, Culp said, "but offshore will be difficult" amid continued pressure from inflation, high interest rates and supply chain bottlenecks.

"We know the industry is ready for a reset," Culp said. "You've seen that in the comments from a number of folks in New York state over the last couple of weeks as well. So we think we can make a much better business with offshore wind, but we're staring at some challenges that we need to address."

Earlier in October, the first 13-MW GE Haliade-X wind turbine was successfully installed at the Vineyard Offshore Wind Project in Massachusetts, under construction by co-owners Avangrid Inc. and Copenhagen Infrastructure Partners P/S.

Demand for onshore wind turbines, on the other hand, "is just incredibly healthy despite the rate environment," Culp emphasized.

GE Vernova, which sells wind and gas turbines as well as grid and nuclear power equipment, is revising its 2023 guidance from losses ranging from $100 million to $400 million to losses ranging from $100 million to $300 million due to "flat to slightly improved free cash flow," GE Senior Vice President and CFO Rahul Ghai said.

"For the year, renewables now expects low double-digit revenue growth," Ghai added. "We are maintaining the guidance for significantly better year-over-year profit with onshore and grid improvement, more than offsetting the offshore pressure."

GE recorded a third-quarter GAAP profit margin of 1.7% on $17.35 billion in revenues, compared to a profit margin of negative 1.6% on $14.47 billion in revenues a year ago. Adjusted earnings per share for the quarter were 82 cents, up 99 cents from the prior-year period. The S&P Capital IQ consensus normalized EPS estimate for GE in the third quarter was 56 cents.

GE also revised its adjusted earnings per share for 2023 upward, to a range of $2.55 to $2.65 from $2.10 to $2.30.

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