General Electric (GE) 24 Oct 232023 Q3 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the General Electric Third Quarter 2023 Earnings Conference Call. [Operator Instructions] My name is Liz, and I will be your conference coordinator today. [Operator Instructions] As a reminder, this conference is being recorded.

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

Liz. Thanks, Third Call. GE's XXXX Quarter to Earnings Welcome I'm CFO, Rahul Chairman and Culp; and CEO, Larry Ghai. joined by

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

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

Larry. to Over

you, thank everyone. morning, Steve, good and

Israel all GE in Hamas with our firmly Before I we stands brutal war. want start, subsequent the customers the to those and team attacks by reiterate on that the impacted employees,

been priority in Our and to of the region. the families. has safety support GE We're their possible employees doing everything them

these announced GE events. people week, the Israel, humanitarian contribution for a Last by to in help surrounding with horrific $X.X million the Gaza many the and efforts impacted areas

society. no people. like by and place I'm devastated lives, our loss innocent suffering of has many, in the so of violence And Terrorism

Turning continues significant driven to raising largely delivered the guidance we're GE solid another and Engines year again. in very team. experience for and performance, execution, Commercial to and a strong the robust demand quarter, Services, GE quarter rapid Aerospace full by growth

of we fleet to combat engines as rotorcraft XX,XXX define commercial and Our to expand the engines XX,XXX continues of and flight. future work

this and chain XX% we've Today, deliveries over customers. shops for Year-to-date, and improved we're are GE visits environment commercial LEAP shop year-over-year up challenging navigating quarter, a and still MRO supply Safran's engine deliver quick-turn to support our sequentially. XX%. Across

high-thrust XX hours. rich history Canada we're building GENx's X XX the plus pipeline unprecedented fastest-selling GEnx-XB spares, tomorrow, during industry growth. For our ordered engine Recently, million Air backlog building sales over and on flight with as engines

and we're investing technologies. in the next-generation developing future, For R&D

our measure high-altitude with the system partners our and an on For testing fuel systems collaborating in to center NASA impact sustainable emissions. hybrid example, environment, at we're ecoDemonstrator industry particularly Ohio. We're aviation also on advancing electric full power program electric for

we're Aircraft providing Attack Defense, Apache the on has for commercial. X opportunities will more test voice Future upgrade TXXX and our And and the cockpit Future first costs cycle data and The consumption. work growth flight beyond pleased the selected TXXX Reconnaissance development accepted program. we've Army systems flight prototypes. Black the Army's the And power, Assault In extend U.S. also reduce XX% U.S. the for been lower Long-Range for Hawk helicopters, life Aircraft fuel recorder engines

the see And more by Senate today defense Next-generation take programs these in development, House Congress military GE's the to appropriation for XAXXX, to like year fiscal missions rotorcraft enable advanced both we're the this our challenging pleased recognizing important demonstrate like future. bills. and engine the in on how allies funding work programs and 'XX and including

we're our transformation, making with satisfied. we're progress, these eliminating far flow from results, even Through lean and However, real waste. improving strong

team LEAP turbine example, by has For manifolds our Pune, in Xx. high-pressure India increased output of

our But within working improvement aftermarket week we plants are given digits input week. sequential with sequentially, output our need by suppliers now. to deliver times We're and both There demand year-over-year. our own turnaround to significantly day, Material increased services supporting of do new pockets deliveries. do more the suppliers, engine of for double pace as up in by in was which and delivery, day and parts spare partnership improvements

in GE products for Power. the and strengthening services. to demand continued our transition, Renewable is Customers Over where Energy meaningful Vernova, both at and driving pre-spin performance energy invest to

at infrastructure are increasing profitable Grid here. their Grid we Wind decade. investments profitable and performance improve our this higher and through We've improved connect both were expect renewables now and strong to globally orders customers quarter, remained reliability. and from industrial Year-to-date, tracking Onshore profitability full with and more selectivity, the which increased at toward rationalized footprint, streamlined year support margins, growth also than Xx will revenue costs Grid.

really like turnaround is way deliver to growth. the to this I team using lean and the profitable drive Grid

time year-to-date reduced power sites we've globally, roughly by year-end. XX XX% example, and transmission's XX% we're For across lead reduction targeting by a

with Now Onshore.

pivoting is And on we're America Our basis representing the These toward where fewer year. is strategy to on products, GE translating working. XX% higher margins Vernova equipment leader more volume markets, market relying workhorse of are this North our backlog of shifts points this to quarter. focus now more XXX in

still count cost and closest the operators. driving head fewer layers, empowering reducing out, We're leaders to

program now the XX% We're roughly and enhancement field Finally, to by halfway through we're complete year-end. improving be expect in fleet reliability. our

XXXX. As losses in of $X expected, difficult roughly billion Wind year with Offshore this remains

year, have but cash performance. similar expect Next losses, Offshore improved substantially we will

that it's So X largely which backlog next we complete or years. over X way through, our working to the a we're tough $X billion expect

making availability of the with Dogger we're installation recently megawatts on is produced operational progress at XXX had Meanwhile, platform. X-megawatt Electricity first Vineyard Haliade-X now rising Bank, Wind. turbines our we the our installed at and of being

Wind Vic entire on at disciplined new to over like and leverage progress expanded geographic terms, risks. to increased Offshore. Onshore similarly writing CEO role and at we've with a business Onshore Gas, taking pricing, of other we've forward, exposure to done We're Looking Abate's the business, in rigor approach our Grid

plan in our Vernova Grid off delivering in confident in Onshore All X Offshore, Power's second and continued plus GE quarter. highly with businesses the and given all, in strength for our we're spinning Renewables, early successfully largest now

GE, Aerospace a Across how pleased I'm business Vernova. simpler, we're more and at GE GE with both as focused operating

to plenty do. and more to quarter, the customers. to strong commitment for Another out My team serving our dedication their go thanks but

leaders, the second independent under of final Aerospace GE intention announced plans the in Exchange Today, on we nearly and Aerospace as quarter to carrying the on Vernova beginning been X investment-grade we GE GEV to closing will Vernova Both spin York GE off GE announced It's step. X years forward of in listed the we're launch with the be XXXX. our GE. Stock New and industry and now since create

from GE the functional we our company experienced to and and have naming inside leading businesses team, promotions hires At leaders important Aerospace, CFO, some public Ken forward. teams completed ensure and best heads Human of the made outside Legal Resources, added Vernova, GE. we've we Treasury GE seasoned leadership Corporate Parks. Affairs, We've At with these

mentioned Vic As ago, CEO Abate the a now business. is moment of Wind I

our proceeds. sheet of simplified also the of and shares by and redeeming for portion We've our AerCap balance strengthened a of our remainder further preferred $X.X equity billion selling

companies. Our X balance the sheet support of is well launch positioned to investment-grade

confidential some key the Form will GE we're first file initial shortly quarter. And approaching filing XX expected a public milestones. the with spin Vernova in

Days. GE in Soon, we'll announce And Directors. Vernova GE to Aerospace of company's March, each plan early and hold Board Investor

we the end at success be Healthcare, both GE at October GE for exactly and where want Building to we're GE Vernova. our of on Aerospace

Rahul Now results. for on our over to more detail

you, Thank Larry.

on driven and the to delivered growth XX% to growth by Overall, X, across Turning aerospace; speak with an with meaningful organic services our headline commercial all metrics. up Slide digits we double I'll basis. equipment up XX%, Orders quarter in were up segments.

increased demand, market turbines pricing. by was XX%, led Aeroderivatives. Engines, Revenue execution was strong Commercial gas and Power Renewables and and improved from benefiting from led Services Aerospace Offshore Grid heavy-duty and and by

productivity points. continued of expansion segments last All adjusted Wind-related year's and and growth. the margin volume, absence investments of the benefits inflation, of to of and This XXX in basis included net charges price, contributed

Adjusted $X EPS almost up was year-over-year. $X.XX,

Excluding and what triple points or $X.XX last EPS more we was expanded than last up year's Wind-related charges, basis year. adjusted delivered margin XXX still

flow, of $X.X free up by generated billion billion, $X earnings. We roughly driven cash largely

Working a capital due management, receivables $XXX million driven challenges. inflated flow, was chain inventory disciplined to positive supply remained by while continued

higher billion, was reduced cash reflecting billion, earnings, flow free $X.X and capital $X.X up Year-to-date, improved linearity. working

become services on the Also, businesses, to now the to Switching significantly year, to sale prepare expenses as gain costs, million interest corporate. we financial for we and as expect Results improved higher to prepare investments from energy range. due reduce in $XXX we standalone income.

immaterial flow standard. the completed review At of earnings, This in indicating with cash is models. experience under accounting to consistent liability Insurance, we an resulted annual claims assumptions our our adjustments new

operating are $X.XX Aerospace's teens, up to of the expecting GE double of earnings free now to billion; a $XXX largely profit $X.X up from and midpoint, billion, revenue largely to at now $X.X and range of AD&A $X.XX, outflow. low that digits; flow the and to from and GE adjusted in lower $X.XX higher improvement, in guidance from full Given year we billion raising of EPS improvement expect growth be strength at low up we cash midpoint, $X.X million Vernova's $X.X billion

on were up business, spending GE mid-teens starting a with each robust with services. equipment Now in strong and Orders and remains year-over-year. moment both departures growth Aerospace. CFM with XX% Demand growing GE

by up Revenue and Engines was growing up Commercial Defense XX% X%. and led XX%, Services

more than XX%. $XXX over or grew Profit million

net pricing, XX.X%. than margins adverse services, more expanded mix. basis and to and Notably, reach offset Higher XXX of inflation, investments points volume

and work strength up XX% with services drive volume, revenue shop revenue from parts External scopes. business, supply were X% XX% LEAP constraints impacting spare commercial and pricing our In year-over-year. to grew than growth. up Engines services visits deliveries internal with grew heavier Commercial profit XX% XX% chain up continued with more

grow XX% from to revenue for mid-XXs the services XX% up XXs to year, in increase to high to this target of fleet to revenue the We our now XX% a OE planning We low the and expect are beginning for mid- now down year. at deliveries year. be

strength franchisees. demand quarter, X.Xx In again, X strong the Defense, this of greater digits quality with Edison strong Revenue book-to-bill lower in offsetting services high Works and unit our than single and grew highlighting remained year-to-date, and environment deliveries.

year-over-year trending XXs we billion, $X.X GE to billion than revenue growth growth are low about better with year-to-date to prior and on Based the Aerospace's cash expectations. free flow up raising $X roughly be strength, profit

to up results earlier and with digits Vernova. GE X% Renewables, again, XX% $XX and delivering And are mentioned equipment in we grew Grid at orders up productivity, to is orders than quarter. today, Moving this to nearly Grid this while was more that starting this At Onshore. XX% business stronger underwriting, quarter now Grid better services Lean, quarter. along billion. increased up double over primarily selectivity and year-to-date we grow

equipment X.Xx quarter up of continues transformative, strategy establishing growth. margins, with orders selectivity. to U.S. and year-to-date Onshore visibility nearly Internationally, IRA In our are be over year. prior greater meaningfully demand orders for at consistent than were the were up for multiyear better The XX%, future but Onshore, North down American more

more international than higher Revenue with repower and output. grew by Onshore, growth double-digit XX%. grew At offset year-over-year lower growth At than nacelle more and tripled equipment was at Offshore, sequentially equipment. North Grid revenue business. American each with increased

our efforts. improved turnaround Profit from

margin driven still Excluding additional Renewables to margins also year's and Grid due expanded price from productivity. volume. benefited Grid price and XXX margins reserve, and basis points and last productivity, expanded elevated roughly continued Onshore by

Renewables year, expect the revenue growth. now For low double-digit

better guidance Onshore than Offshore Grid profit significantly year-over-year are the for the with more and offsetting maintaining pressure. We improvement

margin Aeroderivative and transactional gas lower Equipment with growth was Turning revenue single-digit growth slightly turbines as than as seasonally more lower grew expansion declined higher outages. slightly and services to Services offset gas delivered by units. in heavy-duty services. Power. We steam solid year-over-year orders high offset Aeroderivative

For the to still orders grow we expect total services low single digits. year,

Aeroderivative higher and largely low again, X%, scope grew heavy-duty equipment. on Revenue digits. turbine Services gas grew on price and single up

Profit XXX which pricing expansion of points productivity, grew higher offset basis XX% more margin by volume, pressure. and roughly than with driven inflation

grown digits, switching. digits digits, low continued expanded benefiting utilization, have low services XXX coal-to-gas single including and led margins orders over Power Year-to-date, was This have a higher basis mid-single revenue gas by from points. single up

billings mid-XXXXs. this to We by continuing more have gigawatts also units capacity, shipped of and to services installed X than now XX our extend $X billion year HA HA

In profit positioned seasonally the services quarter, volume. higher Power fourth is from sequential for growth well

Power to year-over-year continues single-digit profit. with revenue growth expect better low year, the For

now Taken the improvement together, for midpoint. profit at and over growth are GE single-digit high expecting of Vernova, $XXX we million year-over-year revenue

end expect slightly our to profit Renewables We are negative continue low profit cash improved expect to million we negative both and Power million of $XXX as driven flow. of free raising and $XXX the by now to guidance operating flat

improvement This, Overall, meaningful with Grid really cash year. proving deliver strong Vernova performance, we drive with can profit better flow GE at are Onshore encouraged we and will that next combined and results. Power's continued

turn And back let me that, to with it Larry.

allows GE continued well. a GE raise grew summarize, to us rapidly GE, To full that to Power you. and thank confidence us perform Vernova again, gives one Renewables our Rahul, strong quarter improved and thus sequentially Aerospace year and for very guide. Overall,

poised than months. service-focused importantly, More global in we're less leaders X innovative launch X industry to

lies proud I'm what go our for Q&A. ahead. excited more team to let's Steve, of even and

[Operator the Instructions] open Liz, please line.

of line Our first Deutsche from Instructions] with [Operator question the Bank. comes Scott Deuschle

impact how a the to about is XXXX? function related should Rahul, production guide at delivery Or is think the challenges we lower to And the then of narrowbody softer LEAP ramp-up? this airframers? your deliveries own to more

Yes.

Let chain having our a that primarily we can me add start, and Larry, challenges I'm supply here. internally. of are sure It's own function

we we chain supplier are XX% while remain in extremely delinquencies we XQ were are improvement seeing environment, working look still at sequentially the an about material supply to actually As XQ. up our inflow, from total hard, high,

year, that improvement is for output the next our we expecting from in LEAP year. we're impacting deliveries XX% So this still end. And XX% on to where other end

next Nigel Coe line of Our comes the Wolfe question from Research. with

question. one Just

Larry, and Vernova breakeven about -- Renewables I billion So pathway Offshore mentioned next next year losses, there to you the I mentioned a year. Is for think, profit think $X for sorry, year? still you this to similar

sets of Grid Onshore profitable Renewables. very would now Offshore for this I X those with Nigel, next. full Yes. overall for row think the for year quarter, a prospect think, That's us and really with profitable be I numbers Again, profitable, with pleased will up in say, the what's difficult. I behind that that But quarters we're being really, turning well. in underlying year, with the

think progress profile. do we're indicated. the Vineyard. is I financial our about, But problematic we through both work projects over billion and of We'll talked megawatts making way and the new Bank the $X it the the Dogger years, with that with we X a as couple next backlog operational

momentum be the should profitability Offshore I we've with and progress in sequential we've the here, with deliver improvement got -- in Grid with from and Power think well, will as but difficult. got Onshore, we

what in done other of the though, is the is selectivity I application think that really by, relevant around businesses we've here. encouraged we're what

ready for know reset. is industry a We the

You've seen couple comments of last number in that folks a in the over well. York weeks State from the New as of

a make we're sure. and better Offshore can for we we quarter address fourth in at here to some challenges Wind, much but with 'XX think we need business in So the that staring

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

or So I wonder maybe, Larry aftermarket you expectations. could talk if Rahul, about the

of how kind the mostly to that changed a internal of between Maybe ahead in this that on aftermarket. it XXs quarter. of year. spares during driven set by new was prebuy -- sustainable a growth spares? it's shop Is then interpret Maybe Was we that the expectations it increase increase? or mid- high And is itself? just said changed -- sequential that You driven is -- price level if visits the and how kind that's price level? by Is big to

Yes.

part of the let's first, go question So where the and you start we'll second to Seth, with back started.

was So quarter. XX% on than this the spare part revenue, spare about part up revenue or XX% more

pricing helps or ship a also which challenge also shipping the with completing that the And less volume that mind increased I parts keep of and is would in third departures the quarter in of versus in kind main shop spare to volume, growth spare a stronger visit it's growth strong. say engine, to parts in when so X first an things: leads departure work Volume volume mid-teens from the half, then scope. quarter. and continues

price second we going this high implemented to pricing, I would single-digit a quarter. increase back say, The part,

forward Now pulled the the we quarter fourth the third to quarter. from increase had price

in of So incremental of we got couple the quarter. a months price

And Larry XX then strong just that for discipline. the pushing combine been XX months has very, to with last very what pricing as

not the So it's about that managing increase, of price also just about implementing increase. implementation price it's a

that. of a job think I we're doing So better

the I widebodies. thing narrowbodies have last work both The the and would been say the scopes heavier, is on on

challenging constrain Narrowbodies phenomena in China to primarily to they're last customers spending widebodies, of year. of especially back of a So shop second coming kind kind visits. times, in trying is

growing, have are their with they little increasing. scopes work cash departures So bit as now a more

spare levers XX%. was of higher those So the which in than growth would that parts more quarter, say are I any X of I attribute buy. the not to main would pre-CLP

spare you the are first visits, would Now between say, of to spare look as growth shop parts, part forward, question, your strong. I and parts

where in the kind will in line growth be the with expect We of fourth which quarter here, departures are. mid-XXs

think for the of teens kind mid-teens to low category. visits, in we're Shop that I year,

up I of been couple thinking quarter. in are visits has right challenging a were the and given points think how chain shop that's we now what supply third

So we of year, the teens that think mid-teens low to the we're kind in range. for

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

question kind shift other general industries. around maybe in backlog. just couple in new One wanted But development fully was are my the to a it the Renewables sort just Offshore Renewables orders things. just focus environment for on Maybe and and of tougher any different across project seems seeing understand of of new equipment -- a orders picture financing or in you because

that perspective wondered has for quarters? changed the on your Just if coming

capital that, versus of dynamics thoughts funding sort spin GE on, upon because that customer to the Renewables of that any and of have advances allied around for should of of cash so level or mix working Vernova cash financing any sort external what of and of And with sort balance for balance?

the think is start I the to demand we despite Well, with Grid, rate with, just and healthy seen Sure. environment. have course incredibly the year, particularly what Onshore again, of through

Obviously, the energy has incentives the in really very busy. transition push Europe, here, us the to large incentives respect the at kept with

So no whatsoever regard. change commentary that respect really with in our to

very know We can large, about see and we 'XX, dynamics to fourth by we good quite be think I the has environment. we about into I X we for I move made look a project to again But ago. as as the in feeling comment the reasons. think its Offshore businesses. those optimistic demand I various own moment demand reset we're look underlying continue the into But think quarter, any that

pricing remarks, prepared add everybody to Vic only Right. of come environment through. the Scott, Larry, as strategy but And better demand that, mentioned pushing is been the selectivity, good, just we kind or the has are not his Julian, and that to seeing in Larry

Onshore X and margins X up Our were about points margins points the in backlog quarter. were Grid up backlog about

So in that turnaround through help obviously should the XXXX. with efforts --

strong Renewables demand pricing So the environment, on good orders.

question balance. the cash your to switching second Now on

foremost, we at we do expect expect kind priority do spin, announced both #X. that of net that and First September back as cash we spin be And Aerospace investment-grade Vernova right? Vernova a position. So to and that's will in in

on that like. cash through we to spin. number to what Obviously, operating of enough sure is want that time we So make have what working the do looks our we're both at companies framework want exactly

you most probably happen think Vernova of we cash. In as balance where as with $X that is of addition, what And right XX-Q, our now will also noticed in have restricted billion cash is, that about about we is.

as So at spin, the cash the GE to business. sheet be on balance update this operating And and to into we balance happens, sure sure about will as we'll that think plus the tap that And cash needs we cash it for of cash both make there's get to don't have spin. make enough restricted external at the that you any need companies an to both give markets we enough at definitely spin. businesses closer

Our question Jefferies. Kahyaoglu line with comes next Sheila from of the

ask just last quarter if QX. margins. year-to-date, could lift helped very in Aerospace sequential the about above XX% step up, as in I down XX.X% quarter, Maybe implies which still good, Same the guide a

does and the you in 'XX a XXX So basis still the breakeven XXX the I guess, this into of LEAPs year? How OE points by Do to quarter that hit the mix [ 'XX? the X,XXX headwind fourth it. headwind filter OE of lot expect with is, ]

If to Okay. Sheila. I forget, please jump everything. just here. remember I'm It's to in try a going multi-part question,

So right. you're

quarter revenue in raise to we us of continue million had to basis XXX quarter. give the growth, confidence think $XXX good XX% profit points the margin I expansion year. a growth,

guide more as of saw million we did profit. guide, by we the about $XXX what raised revenue So you the in year slightly for than of the and the million $XXX quarter, in

XX% a services now higher for Obviously, that that OE incremental revenue, drop-through about lower part revenue. revenue referenced. So of the the is you

given it third think And revenue. of is quarter, spare to is quarter revenue about go about sequential the So is timing lower there mid-teens, of of a the growth just the part the fourth still quarter fourth like strong you kind OE as $XXX services as of incremental you kind even looks shipments. million from what though now

margin So a that's quarterly bit. the impacting to dynamic little

to year. all the about we're expansion percent low But growth that, revenue having profit, $X.X billion for as we said expecting Aerospace, year XXs end in close of billion margin X point $X.X still to GE of kind the of

will good a really, it be really year. So

Based deliveries and growth Now bit about expected. on pretty little initially just LEAP are guidance revised to we big XX% expect lighter we provided, we a in a year-over-year. pointed quarter from XQ as out, fourth a substantial ramp Still the expecting. ramp than had a you that pretty XQ the we're

of some 'XX deliveries the Now LEAP into pushed 'XX. have out and

about of we we So think 'XX X point from about guided had the margins, 'XX. to LEAP outer headwind year as between margin to

be just marginally the higher, of covered So from now if shipments questions. I 'XX. that will to don't 'XX movement LEAP just all know I engine

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

through Was progress hoping this more if Looks making the we comments free the flow like and expect upside in on free should could puts or cash in quarter And the Any takes? having for comments linear get working. flow flow cash quarter. year? free in that that's we on dynamics any the fourth cash the some you're

at, in was right, year all where the the year what, to $X.X of were for $X year-to-date. This Deane, for breath years cash come up the waiting the flow holding fourth billion be in, noticing, quarter kind in thanks year-over-year; the to billion quarter. our Well, of we in the here be in to past time

I running is Aero more think year, demand linear the both and Vernova. with steady at to through obviously a see coupled of what across again approach the business, you course much the

let dynamics, and dynamics, think a some the loaded tried So operationally the are Aerospace we level both far has I of so much perfectly at quarter-end say, But fruit. from, moving borne we've in to do business from away alone Vernova. year-end what to

effects make month-end, we do, do we time well that over have lot drive we we know progress, we to greater linearity as you're can sprints, the frankly, will pull of continue we less positive and think efficiently. a out pointing but But as as quarter-end, not we we But cost year-end know can which there cash there's only at. be rarely

fourth on Yes. number Deane, midpoint, quarter, question, that billion $X.X to our that a few take end just the subtract with And the number billion. Larry just $X.X mentioned, for billion year-to-date you

line Our of Kaplowitz Andy Citigroup. the with next question comes from

color give thinking you in point? talk you're at you the more Defense how year a seem you're forward? about us in having does about towards the It on high moving could Larry, year. turned business budgeting single-digits this this It corner environment up you business? that quarter. the the that Have like was better performance better for business operating Could

would Andy, say satisfied. made Well, I have far progress, from are that we we some but

high I year-to-date. You the now single-digit in that growth saw clearly we'll be zone quarter the in and for think year. the And

X chain talked somewhat which from right? lumpy, job in to is material has our some both that about, internal But of equipment the shipments still this availability we've suppliers, business, challenges with yields supply respect our and made our process our

own if at encouraged shops, we've our think look able lay really in. been to what we're I by that you inside done we've of improvements process the

of the X that's level years. the a but the quality were plenty that of a in to at quarter, of at function you If are look our lowest Still delays internally third progress. we last lot in do, some

test production, cells, in capacity, not the in here up but our only in road We're particularly Lynn. adding

materials, array a valves the to be talking were that a earlier that about of delays And castings, we by on-time some of ago. suppliers. covers performance work in of lot that an of and just commodities, put have Rahul have we the like, more it I people base. and create there's do with raw our that moment flow even the into And terms mentioned to general forgings, seen field the supply Deane

I the think terms really of the we're line encouraged by FARA. environment, seeing again, in top that progress with

for do of are think plenty given continuing combat, the both we be this look to going as heartened dynamics to business. by the XAXXX. to forward, and there's just And poised to I us, to is in the rotorcraft what support the know to we world, opportunity in with continue respect grow on Congress we

Defense the And talk But a may lot for I as today. not overshadowed think a there'll be that's more and the It forward the operating we I again, hand-in-hand lot paid it's Commercial. looking attention in by Vernova work, that better. ready of don't externally And And spin, doing bit to on and time suppliers get think but opportunities, we be a that. execute business we're to we need is need good plenty much team about. We're way our a effort. very we of

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

just actual and flow you're and kind into still we year? about cash Larry a between kind little what more a talk Rahul, thinking bit is sizable Could spear with difference or of we're free next cash question, my of The free to dealing flow adjusted cash flow.

elaborate and the the as get factors system. in these on bit independent can through other companies to factors a maybe we Can a little I think about disconnect? in the things just you of warranty And of this is the working we some think normalization XXXX?

Yes.

let's -- minute flow on Let me maybe of just kind our here. free cash a spend

for year, it's the good look cash free really cash our $X.X-ish generate billion up at the I year. midpoint, to mean we're from $X.X you as first, going at a of So kind did billion contributor last and lower a year. of that that we by a earnings from payments. And helped is that interest is lot that is Clearly, growth. of coming huge

capital numbers. look continues mean, you've you seen I performance our at this working if be to year. our year-to-date strong really But

into that quarter. fourth project you as even seen the You've

sales our managing an doing job outstanding. exceptional are We days

So growth, expecting top our still AR neutral, line revenue that despite we our overall, are balance Jeff. will be

just as payments, growth the to well And then be opportunities improvement. that is the of positive reason strong kind progress say shows given for I the environment. business assets And continued the that continues has contract a

to on The little a ground bit I anchor part there on is want inventory.

we having, Q, our up was that supply as quarter. in substantially the inventory, are from the see will chain Given challenges you

we're slightly build by down be the inventory it expecting fourth end but a Now the it to come of still get the year. will into substantial as we quarter,

'XX, and should -- as that So chain with and supply performance. forward 'XX improved liquidated to getting we look start

So that what this is that continued is that flow say good confidence the -- be us will gives I story. a would where cash

to overall, Now Part take look, cash as flow if free performance. be is XXX%-plus still cash income. XXX% amortization. you amortization net it's of at you out, we'll free flow about But of even that

very it's still very, strong. So

your related anything restructuring -- spin-related on and think expenses. don't of most the adjustments below -- on Now and question I that there's are insurance I and think line spin-related costs adjustments. between to

continue a into maybe bit obviously So -- the that the a add. at some big cost least not a little 'XX. and and is as go But after spin even will number. of should And we and that, insurance restructuring into 'XX

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

hear. It's -- I me. I it's didn't assume

Okay.

Wind shipped a on there but the close in just capacity Wind? have in I Onshore capacity. question you the the quarter, Right, maximum past, think been over turbines How we've capacity are So reductions. to Onshore X,XXX in

Just to trying understand at to maximum are close throughput you how this point?

Onshore, to respect With Andrew?

Yes.

wouldn't 'XX. far of and that. we thus year, our 'XX mindful to And with eye Yes. deliver what the 'XX activity I with we're have not we and the customers backlog bit are I going why I sales a to there sold would we this level you little limit to that think year but in be in and but only It's of have able that 'XX. is pipeline, say seen, say think, at deliveries I look are a that when what's out, to this the an

that you would an particularly an the investments we function underlying manufacturing we truly need. I'm and be a made. that I lower business not ourselves ways about strictly not wanted to smartly and really cost put capacity, this fixed effort that a It's allow do always that, being like position delivery fixed of, because any overall down process there's Not will in might Andrew, we've pare unleash advantage if but much as really to in structure, fixed that be gradually, capacity. so improvement add in to then a base, grow on focused capacity averse will, we to off capital strictly cost to think that can that hesitant, talk capital

poised Wind 'XX home, quarter, team deliver the Onshore here course. the that to I coming think has we're beyond, to performance see, fourth in in underlying all delivered deliver of third see it's pleased the at look the you you which and quarter, If in that will

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

so I timing of the on earnings? multipart is of And the XQ so expect or guess beginning sorry the But XQ, ahead early just it spin, the for XQ question. right to just it of

year? And in profitability any I'd Wind of to around details Wind. you Offshore then hear more Onshore Onshore expect profitability and secondly, the this to love on exit on both the type dynamics

it that as a also Any then year you're comments shipping seems like around through helpful your good to unprofitable would of with getting seems and so be be that this sign more And you're backlog. Offshore, that more well.

Sure.

we a to pretty the is of think time answer simple. early in second forward position question, frame I your Yes, in bring should earnings Joe, announcement be first ahead in Vernova our to quarter. typical the

we be 'XX We've a a will do budget if a shot single-digit go the Grid, here lot we cycle December a range to plan I at and can year. earlier. respect see through together that But unfortunately intention the in obviously would in Wind, improvement. half, in a It better. to as mentioned look of I the not think as November we say be we as at profitable at credible doing second I Onshore, got profitable full Onshore with put should low to with again,

entering would year. back I given way have think about half into the we'll it the that's just that But next momentum

to -- kind mid-single-digit Larry of at in of said, it said total, of Offshore, low be would as on least range. kind be complete levels next of Grid Larry kind at Renewables picture of expect -- remarks, his Onshore to prepared year. single-digit kind losses margins. And kind we just least we we Joe, similar of that as expect

you profit all still if improvement put even together, But so pretty year-over-year significant and on then more cash. a it's on both that

that's So expecting. we are what

for Day So we the that at framework Scott won't Renewables be laid the business. too far from Investor off out

Joe, Vineyard. our make to think Bank shipments, to the initial are sure see the Operationally, Dogger installations just those And that of clear generation progress you're that. initial Power. seeing and we're see the I pleased we're to customers and at I about know

which turn triggers revenue is However, what losses. right, that in the the recognition, carries progress

but operationally So difficult work what encouraging, financially way little bit is that's our of a to through.

So wanted to clarify point. just that

Snyder from of UBS. comes the Chris with question line This

wanted outpace can you assuming continue I on hear up Aviation to which I'm follow me. to margins, expectations.

a headwinds efficiency company's sounds And through just the so and in like also maybe favor. continues service business coming is are mix the understand as the I bit work more muted price/cost it better, doing to but

you that about helping actions mix? of for target margins strength does about seeing you way And segment the you're of just XX% company-specific or current boosting some outside change think Can the the XXXX? been the have talk

of were 'XX not overall level, in right. I in positive at We'll for It positive there's even stuff at the you're price/cost is -- lots Not mean only Commercial at a -- 'XX we at price/cost be us. Defense. and in the was clearly positive but in Aerospace. So in good really company. the Price a company positive Aerospace. happening

-- the and increases on inflation. of managing business the that well So is the getting kind doing really price

well. progress made on We've productivity as

So that's would Not next sitting inventory is are that it that will roll but progress. that underlying the productivity is other the we by currently even we And on extent progress through liked, year. our in have numbers part. encouraged to the

momentum So there productivity. is positive on

you that's margin of XX% all end So is kind the at think obviously, as a about we're that XXXX, for -- still positive. number XXXX. the And of still

and about to XXXX. billion at going where going years year of it, we're $X the call XXXX, profit. to for think it, year, between we're you profit of billion $X.X the couple billion as between, $X But end said call a it's end away. to of We So

$X year a have of growth 'XX still we billion-ish and every between profit 'XX. So

growth, is profit a which mid-teens pretty So good. that's

that will offset start of this We price, spoke be benefits headwind the And about. LEAP as volume, productivity we by partially shipping well. XX

So we'll then some continue going invest create in XX, to pressure. R&D. to that's incremental And

the that's XX% the to to construct margins. get So

Larry, So final comments? any

you. thank Steve,

today. GE our launches both in close, the confident of of time lot progress Obviously, future. this been very I've company's appreciate And performance far frankly, A towards to so year. strong Just never everybody's Aerospace and more Vernova. GE

today We and company. appreciate investment your your support our and of time

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

disconnect. now may You