By John Acher
COPENHAGEN, Oct 27 (Reuters) - Danish wind turbine builder Vestas beat third-quarter profit expectations as input costs came off their 2008 peaks, and stuck to its full-year 2009 guidance, defying expectations of a downgrade.
Shares in Vestas leapt nearly 12 percent to a four-week high before cooling slightly but were still up 8.1 percent at 359.50 crowns at 1131 GMT, outperforming the FTSE clean technology index, which was up 0.5 percent.
'Both the third quarter and their expectations are extremely positive,' said Jyske Bank analyst Christian Nagstrup.
Earnings before interest and tax (EBIT) at the world's biggest producer of wind turbines rose to 244 million euros ($366.9 million) in July-September from 160 million in the same quarter last year, Vestas Wind Systems A/S said.
The result beat all estimates in a Reuters survey of 15 analysts, which ranged from 78 million to 223 million euros.
Analysts said the better-than-forecast operating results appeared to come from lower costs, including the effect of lay-offs earlier in the year, and probably from a better mix of projects as some projects are more profitable than others.
Vestas stuck to its previous guidance for full-year 2009 revenues of 7.2 billion euros and an operating margin of between 11 and 13 percent, despite widespread expectations among analysts that it would lower its guidance.
'Many people have been nervous up to this report that they would downgrade,' said Nagstrup.
Vestas said it expected to announce several billion euros of orders in the coming months to help secure its 2010 outlook.
For 2010 Vestas forecast an EBIT margin of 10-12 percent and revenues of 7-8 billion euros, roughly meeting market forecasts.
'In general, Vestas expects that prices and conditions remain unchanged in 2010 relative to 2009,' the company said.
Prices of some components peaked in 2008 and were not likely to rise in the near term because of weak economic growth, it said.
The U.S. market, however, has excess capacity, leading to 'unattractive' prices and terms on some projects, Vestas said.
NEW 2015 GUIDANCE
Vestas introduced longer-term guidance, which analysts said was ambitious and contributed to lifting the stock.
'Vestas expects to achieve an EBIT margin of 15 percent and revenue of 15 billion euros not later than 2015,' Vestas said, adding that such growth corresponded to its view raising wind's position alongside fossil fuels as a source of energy.
Alm. Brand analyst Michael Friis Jorgensen said he considered the 2015 guidance 'super-aggressive' relative to market expectations and said there were big questions about how Vestas would achieve such a big improvement in margin in a competitive market fraught with overcapacity.
For the last 12 months the credit crunch has dented orders in the wind industry, which have slid from 2007-2008 levels.
'Many customers have been unable to finance scheduled projects either due to increasing funding costs or an actual lack of funding,' Vestas said. 'Moreover, some of the banks that were previously key players in the wind turbine market are no longer active.'
ORDER INTAKE
Vestas said order intake in 2009 had 'provided a negative surprise'.
Order intake in the year-to-date was 2.1 billion euros at the end of the third quarter, against 6.4 billion in the full year 2008. Despite the drop, analysts said third-quarter order intake beat expectations.
Vestas is the world leader with a fifth of the market, ahead of rivals such as General Electric of the U.S., Gamesa and EDP Renovaveis of Spain and Germany's Siemens, Nordex and REpower.
Of the pure-play wind turbine makers, Gamesa and REpower are due to post quarterly results on Nov. 12 and Nordex on Nov. 24.
(Additional reporting by Karin Jensen, Henriette Jacobsen and Peter Starck in Copenhagen, editing by Will Waterman) Keywords: VESTAS/ (Copenhagen newsroom, tel: +45 3396 9649, e-mail: copenhagen.newsroom@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
COPENHAGEN, Oct 27 (Reuters) - Danish wind turbine builder Vestas beat third-quarter profit expectations as input costs came off their 2008 peaks, and stuck to its full-year 2009 guidance, defying expectations of a downgrade.
Shares in Vestas leapt nearly 12 percent to a four-week high before cooling slightly but were still up 8.1 percent at 359.50 crowns at 1131 GMT, outperforming the FTSE clean technology index, which was up 0.5 percent.
'Both the third quarter and their expectations are extremely positive,' said Jyske Bank analyst Christian Nagstrup.
Earnings before interest and tax (EBIT) at the world's biggest producer of wind turbines rose to 244 million euros ($366.9 million) in July-September from 160 million in the same quarter last year, Vestas Wind Systems A/S said.
The result beat all estimates in a Reuters survey of 15 analysts, which ranged from 78 million to 223 million euros.
Analysts said the better-than-forecast operating results appeared to come from lower costs, including the effect of lay-offs earlier in the year, and probably from a better mix of projects as some projects are more profitable than others.
Vestas stuck to its previous guidance for full-year 2009 revenues of 7.2 billion euros and an operating margin of between 11 and 13 percent, despite widespread expectations among analysts that it would lower its guidance.
'Many people have been nervous up to this report that they would downgrade,' said Nagstrup.
Vestas said it expected to announce several billion euros of orders in the coming months to help secure its 2010 outlook.
For 2010 Vestas forecast an EBIT margin of 10-12 percent and revenues of 7-8 billion euros, roughly meeting market forecasts.
'In general, Vestas expects that prices and conditions remain unchanged in 2010 relative to 2009,' the company said.
Prices of some components peaked in 2008 and were not likely to rise in the near term because of weak economic growth, it said.
The U.S. market, however, has excess capacity, leading to 'unattractive' prices and terms on some projects, Vestas said.
NEW 2015 GUIDANCE
Vestas introduced longer-term guidance, which analysts said was ambitious and contributed to lifting the stock.
'Vestas expects to achieve an EBIT margin of 15 percent and revenue of 15 billion euros not later than 2015,' Vestas said, adding that such growth corresponded to its view raising wind's position alongside fossil fuels as a source of energy.
Alm. Brand analyst Michael Friis Jorgensen said he considered the 2015 guidance 'super-aggressive' relative to market expectations and said there were big questions about how Vestas would achieve such a big improvement in margin in a competitive market fraught with overcapacity.
For the last 12 months the credit crunch has dented orders in the wind industry, which have slid from 2007-2008 levels.
'Many customers have been unable to finance scheduled projects either due to increasing funding costs or an actual lack of funding,' Vestas said. 'Moreover, some of the banks that were previously key players in the wind turbine market are no longer active.'
ORDER INTAKE
Vestas said order intake in 2009 had 'provided a negative surprise'.
Order intake in the year-to-date was 2.1 billion euros at the end of the third quarter, against 6.4 billion in the full year 2008. Despite the drop, analysts said third-quarter order intake beat expectations.
Vestas is the world leader with a fifth of the market, ahead of rivals such as General Electric of the U.S., Gamesa and EDP Renovaveis of Spain and Germany's Siemens, Nordex and REpower.
Of the pure-play wind turbine makers, Gamesa and REpower are due to post quarterly results on Nov. 12 and Nordex on Nov. 24.
(Additional reporting by Karin Jensen, Henriette Jacobsen and Peter Starck in Copenhagen, editing by Will Waterman) Keywords: VESTAS/ (Copenhagen newsroom, tel: +45 3396 9649, e-mail: copenhagen.newsroom@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.