Investing.com -- Shares of Vestas Wind Systems A/S (ETR:VWSB) (CPH:VWS) climbed 4% as the company reported a mixed fourth quarter of fiscal year 2024 but still managed to surpass expectations in several key financial metrics.
The Danish wind turbine manufacturer announced adjusted EBIT and revenue figures that beat consensus estimates, alongside a resumption of dividend payments and a new share buyback program.
Vestas’s fourth-quarter results revealed revenues that outperformed the company-collated consensus by 5%, while adjusted EBIT was notably higher, surpassing expectations by 13%. The adjusted EBIT margin reached 12.4%, exceeding the consensus figure of 11.5%. The company’s Power Solutions division performed particularly well, with adjusted EBIT margins arriving at 12.9%, a 120 basis points beat against the consensus.
However, order volume intake for Power Solutions fell short of expectations at 6,516 megawatts (MW), compared to the anticipated 6,892 MW. The average order intake pricing was €1.18 per MW, which was higher than the consensus of €1.06 per MW and RBC’s estimate of €1.07 per MW. Delivered sales pricing during the quarter also exceeded expectations at €1.07 per MW.
Vestas’s service division reported an 8% adjusted EBIT beat, although margins came in at 18%, which is at the lower end of the management’s future guidance range of 18-20%. Free cash flow (FCF) for the quarter increased YoY to €1,792 million, up from €1,656 million in the same quarter of the previous year.
The company also announced a dividend of DKK0.55 per share, which marks a return to shareholder payouts at 15% of net income. Additionally, Vestas disclosed plans for a €100 million share buyback to be executed over the next year.
Looking ahead, Vestas provided its fiscal year 2025 revenue and earnings outlook, projecting revenues between €18 billion and €20 billion and an adjusted EBIT margin ranging from 4% to 7%, with the Services EBIT expected to be €700 million. The company also anticipates €1.2 billion in investments.
An analyst from RBC commented on the earnings, stating, "A strong Q4, to be received particularly well following the disappointments in recent quarters. FY25 guidance is a touch on the light side however on both revenues and margins, though the wider than usual margin range hints at uncertainty and potential conservatism in our view."
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