Vestas Wind Systems shares tumble on Q3 profit miss

5th Nov 2024 10:13

(Sharecast News) - Shares in Vestas Wind Systems were tumbling on Tuesday, after it reported third-quarter revenue of €5.2bn, up 18.9% increase year-on-year, with a core operating profit of €235m, far short of the expected €352m.

The Danish wind turbine giant said its margin of 4.5% was still a significant improvement from the prior year's 1.6%, driven by higher pricing and volume growth.

Elevated warranty provisions and weaker-than-expected service EBIT margins contributed to the lower-than-anticipated profit.

Vestas maintained its full-year revenue guidance between €16.5bn and €17.5bn, though it now expected the EBIT margin to be at the lower end of its 4% to 5% forecast range.

The company also adjusted its service EBIT forecast to €450m, down from a previous estimate of €500m, and reduced its total investment outlook to approximately €1bn from €1.2bn.

Its order intake was 4.4 GW for the quarter, slightly down from the same period last year, bringing its order backlog to a record €28.3bn.

Including service agreements, the combined backlog reached €63.4bn.

Vestas was facing additional headwinds from geopolitical uncertainty and the US election, where candidate Donald Trump had pledged to end offshore wind projects if re-elected.

Chief financial officer Hans Martin Smith still expressed Vestas' readiness to collaborate with the next US administration, stressing the company's commitment to supporting green energy stateside.

At 1536 CET (1436 GMT), shares in Vestas Wind Systems were down 12.32% in Copenhagen, at DKK 119.20.

Reporting by Josh White for Sharecast.com.