COPENHAGEN (Reuters) -Vestas, the world’s largest maker of wind turbines, on Tuesday reported a lower-than-expected third-quarter operating profit and said it expects its operating profit margin this year at the lower end of its guided range.
“The quarter was negatively impacted by a slightly slower-than-expected margin improvement in Service and elevated warranty provisions in the quarter,” CEO Henrik Andersen said in a statement.
The lower margin in the unit, which has some 56,000 turbines under service, was driven by higher cost levels in the Europe, Middle East and Africa (EMEA) region and the United States, it said in its earnings report.
Operating profit before special items rose to 235 million euros from 70 million a year earlier, lagging the 352 million euros forecast by 25 analysts in a poll compiled by the company.
The company now expects its full-year operating profit margin at the lower end of its guided 4-5% range. It still expects revenue of between 16.5 billion and 17.5 billion euros.
Vestas’ service business, usually a bright spot, is now seen generating operating profit before special items of around 450 million euros this year, down from a previous estimate of 500 million euros.
“The service profitability reflects ongoing scrutiny to improve operational efficiency,” Vestas said.
(Reporting by Stine Jacobsen, editing by Terje Solsvik)
