Danish wind turbine maker Vestas wrong-footed investors on Wednesday, affirming its expected 2011 profit margin despite wider weakness in equipment prices, suggesting a technology edge over Chinese and other rivals.
That contrasted with the situation in solar power, where cheap Chinese producers have undercut Western rivals, helping precipitate a bankruptcy filing this week by U.S.-based Evergreen Solar.
The statement from Vestas Wind Systems A/S drove its shares more than 25 percent above Tuesday's more than six-year low and lifted others in the sector. Shares in Germany's Nordex SE and Spain's Gamesa Corp SA both rose.
Nordex had last week said turbine prices fell in the first half of 2011, alongside a profit warning, raising concerns for margins across the industry.
Wind power depends on government support and on political support for reaching climate change targets, which some see as less of a priority against the backdrop of a grimmer economic outlook.
But Vestas, whose turbines are used worldwide and which is ramping up capacity in the emerging wind power market of Brazil,said its order book was strong.
"Despite global uncertainty, we feel that Vestas is in a good position to get the order intake that we have outlined," Chief Executive Ditlev Engel told Reuters, referring to the company's forecast for between 7,000 MW and 8,000 MW of orders this year, down slightly on last year.
"In the first half year we had … firm and unconditional orders of nearly 2,900 MW, and as a rule Vestas has always had a higher order intake in the second half of the year than in the first half," Engel said.
The company's technology and broader service offering helped it beat forecasts for second-quarter profit and maintain full-year guidance for a 7 percent margin on the basis of EBIT (earnings before interest and tax), said analysts.
