Vestas Wind Systems upgraded its margin forecast and reported a third consecutive quarterly profit, reinforcing a turnaround at the world’s largest wind turbine maker.
The manufacturer expects its margin on earnings before interest, taxes and special to reach at least 6%, this year, a percentage point higher than its previous guidance.
It had net income of 94million euros ($125million) in the three months through June, rebounding from a $82.5million loss a year ago.
Chief executive Anders Runevad has shed almost a third of Vestas’s workforce along with 12 factories to cut costs since he took charge on September 1 during a run of nine consecutive quarterly losses. It snapped its string of losses in the last quarter of 2013 and is now halfway to its first annual profit since 2010.
“With another solid quarter showing improvements in most areas, we remain focused on executing on our strategy: profitable growth for Vestas,” Runevad said in a statement released by Vestas from its headquarters in Aarhus, Denmark.
“Based on the improved cost-base and the expected delivery plan for the second half of the year, we raise our 2014 EBIT margin target.”
Vestas reiterated forecasts made in February for revenue of at least $8billion in 2014 and a minimum of $399million of free cash flow.
Earnings before interest, taxes and special items rose to $138.4million from $16million a year ago. The operating margin before special items increased to 7.8% from 1% a year earlier.
Sales rose 13% to $1.78billion, compared with the average analyst forecast of $1.88billion. Orders in the quarter advanced 18%to 1,932MW.
Shipments increased 27% to 1,457MW.
Vestas last year regained the leading share in the wind turbine market that it lost to General Electric in 2012, according to Navigant Consulting.
It put China’s Xinjiang Goldwind Science & Technology and Germany’s Enercon at second and third, with GE fifth behind Siemens.
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