What happened
Shares of industrial giant General Electric (GE -0.12%) were up by 3% just before the close of trading today. The move comes on the back of the announcement of an order to construct a new gas-fired power plant in Ireland.
So what
The order itself is not a needle mover. However, it is a symbolic plus for GE Power and a sign that the business is firmly positioned as a solid earnings and cash-flow generator for the company.
The order is for a temporary reserve power plant in Dublin, which, according to a GE press release, will be "powered by 6 GE LM2500XPRESS gas turbines delivering a combined capacity of up to approximately 200 megawatts (MW)."
These turbines are called "aeroderivatives" (meaning they were derived from GE aircraft engines) and are relatively small turbines. Since GE only received 43 orders for aeroderivatives to the end of the third quarter, another order for six more is obviously helpful. However, the key metric in gas turbine orders is overall output, and an order of just 200 MW is just another 0.2 gigawatts (GW) on top of the 6.8 GW in orders GE received to the end of the third quarter.
Now what
That said, GE's provisional guidance for GE Power in 2023 is so wide you could drive a gas turbine through it -- management gave a range of $1 billion to $2 billion for GE Power profit in 2023 during the investor day presentation in March.
So, this news encourages investors to hope for something toward the higher end of that extensive range. Coupled with tentative signs of recovery at GE Renewable Energy, GE's combined power and renewable energy business (GE Vernova) could positively surprise investors in 2023.
