Citing decreasing deliveries, escalating turbine costs and warranty provisions, Vestas Wind Systems announced a larger than expected loss for the first quarter 2012.
The loss nearly doubles last year’s first quarter dip, widening from a reported 85 million euros ($214 million) at that time to today’s 162 million euro ($214 million) plunge. The drop far exceeded industry estimates, in most cases by double, taking investors by surprise. Revenues rose 4 percent, from 1 billion euros ($1.3 billion) to 1.1 billion euros ($1.4 billion) during the same period.
The losses continue a downward spiral for Vestas. In February, the company accepted the resignation of Chief Financial Officer Henrik Norremark after the company reported a 2011 loss four times greater than estimated. Norremark’s departure followed Vestas’ revised earnings estimates that dropped over two consecutive periods.
Norremark, who also served as deputy chief executive officer, adopted that role as part of a restructuring plan announced in January that included cutting 2,335 employees, or 10 percent of the workforce, while halting factory production in an attempt to save more than 150 million euros by the close of 2012. Within a month, Norremark was out.
On Thursday, Vestas CEO Ditlev Engle again raised the specter of U.S. layoffs, saying the company would decide in the third quarter of 2012 if the company would follow through on staffing cuts, based on the then-perceived status of the PTC.
Engle’s worries raised alarms in Sen. Michael Bennet’s (D-CO) camp, eliciting a statement and pledge to fight for the credits and the future of the industry.
“The wind energy tax credit is vital to thousands of Coloradoans and tens of thousands of Americans whose jobs are at risk,” Bennet said. “Standing on its own, this tax credit has bipartisan support, and I believe it has the votes to pass. We will continue to look for every available avenue to advance the extension and provide certainty to business leaders who are making significant purchasing and employment decisions now that will impact the U.S. economy not only in 2012, but also over the next three to five years.”
Contact Staff Writer Gene Sears at email@example.com.