Analyst: Vestas Wind Systems Should Recover In 2010

DENVER (AP) -- Vestas Wind Systems A/S is poised to take advantage of what should be an improved wind turbine market next year, but likely will cut 2009 guidance when it releases second-quarter results because of the sluggish economy, an analyst said Monday.

The Randers, Denmark-based company, the world's biggest wind turbine manufacturer, will issue second-quarter results Tuesday.

In a note to clients, Jefferies International Ltd. analyst Michael McNamara said he believes order flow probably has been insufficient for Vestas to meet its guidance of euro7.2 billion (US$10.1 billion) for the fiscal year 2009.

Most analysts believe Vestas will reduce its prediction but the key will be the size of the cut, he said.

"We suggest that as long as Vestas can maintain moderate single-digit growth, this should be enough to placate the market although clearly this would depend upon the tone of the forward looking statements," he wrote.

The global wind power industry has been hurt by the recession with some companies laying off workers and others shelving projects to conserve cash.

In April, Vestas said it would lay off 1,900 workers -- about 9 percent of its 21,000-member work force -- because of sluggish demand in northern Europe.

McNamara believes the market will recover in 2010 and produce a strong demand for turbines driven by government incentive programs, particularly in the United States, lower costs for raw materials, improvement in project financing availability and improving technology.

The company isn't expected to announce 2010 guidance until the third quarter but McNamara said any signs of improvement in medium and long-term order flow would be "a very positive development."

Jefferies has issued 2010 guidance of euro9.2 billion (US$12.9 billion) for Vestas.

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