Vestas Wind Systems A/S, the biggest maker of wind turbines, said first-quarter profit rose more than fourfold and maintained its guidance for 2017.
Net income climbed to 160 million euros ($176 million) compared with 35 million euros the year before after sales rose 29 percent to 1.89 billion euros, the company said in a statement. Analysts expected profit of 109.4 million euros and revenue of 1.81 billion euros, according to data compiled by Bloomberg.
“Vestas delivered solid first-quarter results and is as expected off to a good start in 2017 with satisfactory order intake and improved combined order backlog,” Chief Executive Officer Anders Runevad said in the statement. The company expects full-year revenue of 9.25 billion to 10.25 billion euros and margins on earnings before interest and tax of 12 to 14 percent.
It’s the 14th consecutive profitable quarter for Vestas, extending the rebound from a slump in turbine prices that prompted a restructuring and eliminated 3,000 jobs. The Danish company recently surpassed General Electric Co. to gain the biggest share of the U.S. wind market and announced a new strategy to diversify beyond turbines.
Vestas stock rose as much as 22.50 kroner, or 3.8 percent, to 613.50 kroner a share and traded at 606 kroner at 9:45 a.m. in Copenhagen. It was the largest intraday gain since Feb. 8, pushing the stock to its highest price since September 2008.
The company’s order intake for projects in 13 countries was just over 2 gigawatts, a decrease of 15 percent compared to the year before after a 1-gigawatt order wasn’t repeated. Most turbines will be delivered to the U.S., Germany and China. Vestas turbine order backlog grew by 500 million euros in the quarter to 9 billion euros.
Vestas is laying plans to expand beyond wind power as growth rates level out. It’s seeking stakes in energy storage startups such as companies developing industrial-scale batteries. The turbine maker is also interested in pumped hydropower storage.
“All kinds of technology that actually enable us to integrate even more wind into the electricity system are interesting for us – that’s storage, grid interconnection,” according to a Bloomberg interview with Runevad, who said Vestas is establishing technology cooperation with leading batterymakers. “For us, it’s to focus on our wind turbines and to make sure they are optimally designed into the electricity grid system.”
Service agreements 369 million euros revenue in the first three months, up 23 percent compared to the same period last year. The company’s service order backlog increased 300 million euros to 11 billion euros.
Vestas is targeting 2 percent annual growth in turbine sales and 9 percent for servicing the machines. Revenue at the company’s joint venture with Mitsubishi Heavy Industries Ltd., MHI Vestas Offshore Wind A/S, could climb 38 percent on greater demand for offshore turbines, according to a presentation at its annual general meeting last month.
The company earmarked 705 million kroner to a stock buyback in February and will consider another buyback in the second half of the year, according to Chief Financial Officer Marika Fredriksson.
“We will revisit the share buyback in the second half,” she said by telephone. “If we see any opportunities to buy on acquisitions on technology or service business, we prioritize that for obvious reasons.”
Vestas has installed a total of about 83 gigawatts of wind turbines in 76 countries.