Vestas Wind Systems A/S shares surged nearly 19% on Wednesday, reaching their highest level since December 2023 after the Danish wind turbine manufacturer delivered a much stronger-than-expected second-quarter performance.
The rally followed a major profit beat and an improved full-year margin outlook, which helped push Vestas shares to their highest level of the year.
Vestas Q2 Profit Easily Beats Expectations
Vestas reported adjusted EBIT of €446 million, more than double the analyst consensus estimate of €205 million.
The figure also came in well above the upper end of the forecast range of €232 million.
Jefferies analysts said the strong result was mainly driven by the company’s Power Solutions division.
Power Solutions Delivers Strong Margin Growth
Power Solutions posted an EBIT margin of 10.4%, significantly above the 4.3% consensus forecast.
The segment generated revenue of €3.83 billion and adjusted EBIT of €397 million. Analysts had expected adjusted EBIT of about €156 million.
Margins in the division improved by roughly 11 percentage points compared with the previous year.
Jefferies attributed the improvement to strong execution across both Vestas’ onshore and offshore wind operations.
Vestas Raises 2026 Margin Guidance
Following the strong second-quarter performance, Vestas increased its 2026 EBIT margin guidance before special items to 7%-9%, up from its previous forecast of 6%-8%.
The company maintained its full-year revenue outlook of €20 billion to €22 billion.
Planned investments also remained unchanged at approximately €1.2 billion.
According to Jefferies, the midpoint of the new margin range could translate into roughly a 9% increase to consensus earnings estimates.
Revenue and Gross Profit Top Forecasts
Quarterly revenue reached €4.72 billion, around 4% above the €4.54 billion analyst consensus.
Gross profit also exceeded expectations, coming in at €801 million compared with an average estimate of €586 million.
The result was also comfortably above the top of the forecast range.
Service Business Remains Stable
Vestas’ Service division generated revenue of €896 million, broadly in line with expectations of €900 million.
Revenue declined compared with the previous year due partly to lower contract activity in EMEA and the Americas, as well as weaker transactional sales.
Adjusted EBIT for the Service business reached €149 million, slightly above expectations.
The segment recorded an EBIT margin of 16.6%, which was broadly in line with market forecasts.
Net Profit Jumps Sharply
Vestas reported net profit of €285 million, far above the €144 million consensus estimate.
That also represented a significant improvement from net profit of just €34 million during the same period last year.
Free cash flow reached €99 million, slightly below expectations of €112 million.
Management indicated that cash generation would be weighted more heavily toward the second half of the year.
Net cash stood at €92 million, while financial leverage remained at zero.
Wind Turbine Orders Beat Estimates
Wind turbine order intake reached 3,349 megawatts, around 3% above the consensus forecast of 3,266 megawatts.
Strong onshore orders in the Americas supported the result, while no new offshore orders were recorded during the quarter.
Average selling prices came in at approximately €1.0 million per megawatt, down from €1.11 million a year earlier.
Jefferies said the decline reflected the absence of offshore orders and a larger contribution from lower-scope U.S. projects.
Deliveries Also Exceed Forecasts
Vestas delivered 3,504 megawatts of wind turbines during the quarter, above the 3,406-megawatt analyst forecast.
Higher volumes in the EMEA region were a key driver of the stronger delivery figures.
Vestas Announces €400 Million Share Buyback
Alongside its earnings report, Vestas announced a new €400 million share buyback program.
The program is scheduled to run from August 13 through the end of the year.
Jefferies said the buyback demonstrated management’s confidence in the company’s financial outlook.
The investment bank maintains a Buy rating on Vestas shares and a price target of DKK215.
Wind Energy Demand Remains Strong
Chief Executive Henrik Andersen said demand for wind energy solutions remains robust as governments and businesses continue seeking secure, affordable and sustainable sources of power.
The combination of stronger profitability, higher margins, solid turbine orders and the new share buyback helped fuel the sharp rally in Vestas shares following the company’s second-quarter results.
