Wind Turbine Maker Vestas Turns Q1 2014 Profit
Danish wind turbine maker Vestas surprised the market on Friday by returning to profit in the first quarter due to improved margins, higher revenue and lower fixed capacity costs, sending its shares up 7 percent.
Operating profit before special items amounted to 40 million euros ($55.45 million) in the quarter from a loss of 108 million euros a year ago. Analysts polled by Reuters had on average expected a 29.9 million euros loss.
Vestas has shed more than 5,000 jobs, closed plants and sold unprofitable business in a turnaround effort after overcapacity and cut-throat competition hammered many renewable energy companies. It now aims to push into emerging markets like India and China.
Last year, Vestas made a net loss of 82 million euros, down from a loss of 963 million euros loss in 2012. It was the company's third year in a row of net losses.
"As we expected, first quarter showed improvements in all major areas. This is a result of a lot of hard work from my colleagues," Chief Executive Anders Runevad said in a statement.
Vestas reported a 84 percent rise in order intake in the first quarter to 1,188 megawatt (MW), above the 950 MW analysts expected in a Reuters poll.
After a five-fold increase in 2013, Vestas' share price has risen by a further 54 percent in 2014, outperforming the Danish benchmark index.
The shares were up 7.2 percent by 0722 GMT, outperforming the index which was up 0.6 percent.
The company repeated its expectations for 2014 revenue of at least 6 billion euros, and said it still predicted an operating profit margin before special items of at least 5 percent and free cash flow of at least 300 million euros.
($1 = 0.7214 Euros)
(By Shida Chayesteh and Teis Jensen)