In a few weeks the earnings report season start for third quarter and in these time of recovery and transition to green energy I thought it would be interesting to take a look at how well the wind power companies are doing.
The world’s largest wind turbine manufacturer Vestas showed horrible results in the earnings report for second quarter of 2010, and actually reported a loss of 119 million Euros, $163 dollars. The poor result made the company downgrade the profit outlook for 2010 and it came as a shock to many of the analysts.
Their competitors Siemens Wind Power, Clipper Wind Power and Nordex did not show the same trend at all and reported great profits for that particular quarter.
And looking at the results now kind of make me wonder why the world’ leading wind turbine manufacturer is doing so much worse than all of its competitors. According to one analyst I talked to Vestas is having greater loss because it spend money more on research and development in these hard economic times.
To some extend that is true. Vestas did raise it costs for R&D in second quarter compared to the same quarter a year ago. However, the expenses only rose from 35 million Euros to 44 million Euros, which does not explain the 119 million Euros reported loss.
On October 26th Vestas is ready with the earnings report for third quarter and it will be interesting to see if they continue the negative trend, spend more money on R&D or come out with a profit. During the last quarter Vestas announced several new orders and a number of banks analysts changed their recommendations on the stock to “buy” from “sell”. So maybe there is good news for Vestas investors and the wind power industry.
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