Following a disappointing 2021, investors in wind power were hoping for a better 2022. Once again, the leading players in the West, namely General Electric's (NYSE: GE) renewable energy business, Vestas (OTC: VWDRY), and Siemens Gamesa (OTC: GCTAY), will miss their initial earnings estimates this year. First, shortages and supply chain issues have bedeviled the global economy over the last year, and those have in turn contributed to higher prices for raw materials.
COPENHAGEN (Reuters) -Wind turbine maker Vestas expects to deliver more positive results next year, its chief executive said on Wednesday, as high costs from raw materials and transport, which hit second-quarter results, are passed on to customers. Shares in Vestas rose 4% after the firm said it raised its prices in the second quarter by 22% compared to the same period last year, a sign that the company's hard-hit profit margins could improve. Heightened competition, supply disruptions due to the COVID-19 pandemic and soaring metals prices exacerbated by the war in Ukraine have made it difficult for wind turbine makers to generate positive margins, despite solid demand.
On the call today are Jim Heppelmann, chief executive officer; and Kristian Talvitie, chief financial officer. Before I dive in, I'd like to point out that Kristian will cover the effects of the strengthening dollar later during his section of the call.