H. Lawrence Culp
Chairman and Chief Executive Officer, GE and Chief Executive Officer, GE Aerospace at General Electric
Steve, thank you, and good morning, everyone. We're building broad-based momentum and GE delivered solid third quarter results with Aerospace leading the way. Within GE Vernova, power remains on-track to grow this year and we took significant actions this quarter to reset renewable energy for future profitability. And external catalysts like the recent US climate legislation and the European energy crisis are increasing investment in new decarbonization technologies, helping position this business for longer-term, profitable growth. Our planned spins are on track with GE Healthcare ready to launch in January and GE Vernova in early 2024. GE HealthCare is in the homestretch now. I'm particularly proud of what they've accomplished, navigating COVID, bringing in a new CEO and CFO and now preparing to operate as an independent global leader in precision health. Pete Arduini is with us today to give you a full update.
Now a moment on GE Aerospace. I'm really excited to be leading this exceptional franchise, especially during this unprecedented industry ramp. We have a tremendously talented team, a highly differentiated product and technology portfolio and leading positions in attractive commercial and military sectors. And we have leaders that nicely balanced unparalleled experience and fresh perspective as nearly half are new to their roles in the last year. Our high-caliber team includes Russell Stokes leading our commercial engine business; Amy Gowder, who runs our military business; and Rahul Ghai, who recently joined as CFO. In that same vein, I'd like to recognize Shane Wright, who's retiring after 34 years of service. As many contributions across GE and GE Aerospace have been invaluable and help build a world-class business and team, Shane, thank you.
The opportunity and the imperative to embrace lean more deeply both within our four walls and with our partners, suppliers and customers has really stood out to me over the last several months. We've been taking a harder look at our operating rhythms, moving toward a more frequent weekly and monthly cadence for each of our P&Ls. This has helped us manage the business in real time and deliver better, faster and more efficiently in what is clearly a dynamic environment. The process capability improvements are real. Taking last quarter's example, the additional 20% of existing engineers that we reprioritized to support delivery. Through daily management, they're helping solve problems closer to the point of impact faster and that's improving engine deliveries.
Engine output was up double digits sequentially with LEAP units up over 50% sequentially, a credit to the entire team especially those in our supply chain organization. However, the post pandemic recovery requires continued sequential improvements for the foreseeable future, which our lean efforts will help us deliver. We have a similar story in services, where internal shop visits grew 10% sequentially and more than 30% year-over-year. Lean helps us reduce cycle time, improve turnaround time and generate capacity for more.
In addition to strengthening our operating rhythms to meet this extraordinary industry demand, we updated our strategic plan last month with an eye toward how we continue to shape the future of flight for years to come. The quality of our technology and product roads, coupled with the energy and collaboration in the room, have me even more excited about what this business will become when it's a stand-alone aerospace leader. First things first, of course, with respect to the post-COVID ramp, but this is a business with an exceptional future.
Turning to total company results on Slide 3. Orders declined 7%, driven by a tough comp at renewables against prior year megadeals in onshore wind. Excluding renewables, orders were up 8% and positive across all segments. Revenue was up 7% with particular strength in services, up 20%. Looking at the segments. Aerospace and Healthcare were both up double digits as the market recovery continued and our pricing and delivery actions took hold. This was offset by Power down mid-single digits and renewables down 10%, largely due to lower US volumes resulting from the PTC labs and our heightened new business selectivity.
Collectively, supply chain and macro pressures adversely affected revenue by about 4 percentage points in the quarter, easing slightly again. Adjusted operating margin declined 190 basis points, strength at Aerospace from volume and price was more than offset by renewables, which included about $500 million of higher warranty and related reserves tied to fleet performance, which we'll address shortly. Excluding this impact, margin expanded by 80 basis points. Healthcare improved sequentially and Power decline year-over-year due largely to planned service outage seasonality. Adjusted EPS was down. Excluding the $0.40 renewables reserve, EPS was $0.75. Free cash flow was $1.2 billion, largely driven by strong adjusted earnings.
We've continued to build inventory as we prepare for the fourth quarter ramp and continue to work through ongoing supply chain challenges. All in all, I'm pleased with how the GE team has continued to navigate a tough operating environment. And for the year, we're maintaining our prior outlook for revenue, trending toward the low end of our high single-digit growth range. We now expect 125 basis points to 150 basis points of operating margin expansion and $2.40 to $2.80 for EPS. This is primarily driven by the higher warranty and related reserves at renewables this quarter. And aligned with the color we shared in the second quarter, we're expecting free cash flow this year of about $4.5 billion.
Turning to GE Vernova. Power is a stable cash generator as gas utilization grows, our ongoing focus on services at steam, take root, the continued turnaround progress at Power Conversion and innovation at nuclear. Now more on renewables, where we've all been disappointed with our year-to-date performance. Our proven leadership with Scott Strazik and his team at the helm is leveraging the lessons from their power playbook to transform renewables fundamentals. Let me break down how we're going to improve performance there.
Recall, we look at this in three parts: onshore wind, offshore wind and grid. I'll take those in reverse order. Grid is a $3 billion business, which will be the first to profitability. Market demand in automation and hardware remains strong. This year, we expect double-digit orders growth and thanks to our cost efforts, significant margin expansion along with profitability here in the fourth quarter, setting up 2023 is a profitable year for grid.
At offshore, we're transitioning from a new product investment into a business with roughly $1 billion of revenue and growing. The roughly 80 turbines we installed and commissioned for EDF recently were on schedule. And we're now shifting to the 7-gigawatt Haliade-X backlog, knowing our initial 200 deliveries will be challenging financially in an inflationary environment. But as we move to the next tranche of projects and reduce cost, we expect to approach profitability in offshore in the mid-20s.
Finally, onshore is a $9 billion revenue business, more than 60% of the segment today and most of the operating loss. This is the battleground. Overall, for renewables, we expect to achieve profitability in 2024. We've quickly innovated in the fast-growing Onshore Wind industry, introducing larger turbines to provide leading performance and competitive project economics for customers. Since 2017, we've added over 40 gigawatt to the grid, increasing megawatt hours per turbine significantly. However, by much of the industry, such rapid innovation strains, manufacturing and the broader supply chain. It takes time to stabilize production and quality on these new products, which in turn pressures fleet availability. We need to industrialize faster to counteract these dynamics, and we are.
First, we're drastically simplifying and standardizing too many variants into what we call workhorse products, so we and our suppliers can implement more repeatable manufacturing processes. This enhances product quality and reduces cost. In our existing fleet, we're deploying corrective measures, enhancements and monitor repair programs to deliver high 90s availability consistently. We expect to implement the corrective measures associated with these warranty and related reserves over the next couple of years. With fleet availability as our true north, we'll continue to be a leader and deliver for our customers.
Second, as we've talked about in the past, we're being more selective about where we play, going after fewer markets where we have the right product and service capabilities and can execute profitably including focusing more on equipment-only projects. We're also seeing improvement in both orders and sales pricing. Third, we're reducing fixed costs. We're decreasing global headcount in Onshore Wind by about 20% and more broadly delayering at Renewable Energy. Across GE Vernova, we're expecting about $500 million of annualized savings from a $600 million restructuring program we plan to implement over the next few years.
Reflecting on the broader market, when we spoke just 90 days ago, the prospect of significant US climate legislation this year was unlikely. Recent months have been game changing. The Inflation Reduction Act provides much needed certainty and stability for us and our customers, especially in Onshore Wind. The bill's $370 billion in tax credits over the next decade aligned tightly with GE's decarbonization technologies. Additionally, the Infrastructure and Investment Jobs Act provides at least $75 billion for investment in Grid, Nuclear and Breakthrough Technologies.
In Europe, we're seeing more urgency and pragmatism to reduce emissions and make energy more resilient. Take the new European taxonomy, which reinforces the important role of gas and nuclear alongside renewables. As Europe looks to swiftly address energy security concerns, customers want to engage GE's full technology road map, including wind, gas fuel blends and grid. While these external catalysts won't factor into our results overnight, they improved the demand and economic profile for our businesses remarkably.
To that end, we see a robust future in contrast to the current orders troughed. Altogether, we're at a significant inflection point for onshore and renewables overall. While we expect renewables to achieve profitability in 2024, about a year later than planned previously, we remain very excited about GE Vernova's future.
With that, let me hand it over to Carolina.