Vestas Wind Systems has the largest share of the wind turbine business and more production capacity than any of its competitors.
Yet, the company is seeing erosion in its market position at just the wrong time: credit markets for wind farms are loosening up and U.S. stimulus money has begun flowing.
More risk in growth next year, even in a recovering market
Vestas will benefit from the spending in the United States and from a general uptick in wind farm growth next year. But some Wall Street analysts are taking a cautious approach to the Danish company as rivals General Electric and Siemens come stalking.
In a research note from one – John Hardy at Broadpoint AmTech – the question of the company’s business projection for next year came front and center. He says risk in annual performance is rising and estimates revenue should increase 18 percent.
That would be less than the 20 percent growth management has forecast in 2009. But even this is up for grabs. In the company’s second quarter report, shipments were down 20 percent and the orders backlog was off 45 percent, notes Hardy.
The challenge for Vestas is maintaining pricing – it charges more for its turbines – while solidifying its market share. The company has 42 percent of the market, but is losing share at about 5 percent a month.
The wind market should be whirling next year. The question is whether Vestas will whirl along with it.
