Investing.com -- Shares of Vestas Wind Systems A/S (ETR:VWSB) (CPH:VWS) fell 3.7% today, even though the company reported solid financial results for the fourth quarter.
The Danish wind turbine manufacturer announced FY24 revenue of €17.3 billion, surpassing both its Q3 guidance range of €16.5-€17.5 billion and consensus estimates of €17.0 billion. Earnings before interest and taxes (EBIT) before special items reached €741 million, hitting the lower end of the 4-5% margin guidance and outperforming Bernstein’s and consensus estimates.
Despite these strong results and the announcement of an unexpected €100 million share buyback and €75 million dividend, Vestas guided to a wide range for FY25 revenues of €18 billion to €20 billion, which requires achieving the higher end to meet consensus expectations.
The company’s EBIT margin forecast for FY25 is between 4% and 7%, with services EBIT projected at approximately €700 million. Total (EPA:TTEF) investments for FY25 are expected to be €1.2 billion.
Warranty costs significantly decreased to 2.6% of revenue in Q4 from 6% in the previous quarter, reflecting an improvement in this area. The order intake for Q4 stood at 6.5 gigawatts, with an average selling price (ASP) on new orders rising 7% quarter-over-quarter. The service backlog was reported at €36.8 billion, with Power Solutions backlog at €31.6 billion.
The company also addressed market developments in the US, noting diverging trends between onshore and offshore markets, with the latter experiencing a halt.
However, Vestas has a well-covered onshore backlog in the US for 2025 and into 2026. Management remains positive about the ongoing conversations with customers and state-level politics, and they feel prepared for potential further tariff impacts.
Bernstein analysts commented on the results, "We see these results as positive, indicating stabilization after difficulties in 9M, plus proof of delivery in a back end loaded year (previously questioned). Cautious guidance for FY25 does not cause excessive concern given the clear drivers, e.g. the ongoing ramp up of offshore, US onshore and another back-end loaded year."
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