Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Vestas just gave investors the wind update they had been waiting for.
After years of cost pain and supply-chain headaches, the turbine maker is finally showing that stronger orders can turn into actual profit. Vestas shares jumped around 19% to 20%, their biggest one-day move in years, after the Danish wind turbine maker reported a much stronger second quarter than expected. Adjusted EBIT came in at €446 million, more than double analyst expectations of roughly €205 million and far above the €57 million reported a year earlier.
Revenue reached €4.72 billion, ahead of consensus expectations of about €4.54 billion. The Power Solutions division drove the beat, with adjusted EBIT of €397 million and a margin of 10.4%. Analysts had expected a much lower result, with the outperformance helped by stronger execution in both onshore and offshore operations.
Vestas raised its full-year EBIT margin outlook to 7% to 9%, up from 6% to 8%, while keeping revenue guidance at €20 billion to €22 billion. The company also announced a €400 million share buyback running through the end of the year. CEO Henrik Andersen said the move reflected confidence in the business and rewarded shareholders who stuck with Vestas through its tougher years.
Orders also improved sharply. Second-quarter turbine orders rose to 3.35 gigawatts, worth €3.4 billion, up from 2 gigawatts and €2.2 billion a year earlier. The total turbine backlog now stands at 32.5 gigawatts, worth €36 billion.
This is what a clean wind turnaround is supposed to look like. For much of the early 2020s, Vestas was stuck in the industry's least attractive position: selling essential energy equipment while struggling to make enough money from it. Developers pushed for cheaper turbines.
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