Huge losses for Vestas. Will it affect plans for new Portland headquarters?

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The same day it announced the decision to upgrade its North American headquarters in Portland, Oregon to a much larger $66 million building, Vestas, the world's leading manufacturer of wind turbines, reported on August 18, 2010, a larger than expected $154 million second quarter loss, sending its shares plummeting more than 20%. The company said it would cut 600 jobs, mainly short-term contractors, in its home country of Denmark, but prospects look better for North America, where Vestas has recently begun to see orders rebound.

Vestas earned a respectable $8.8 billion in 2009, but was still short of its original projections of $9.9 billion. It had predicted revenues of $12 billion for 2010, but then lowered its estimates to $9.6 billion, and now has lowered them further to $7.7 billion. The company attributed its drop in revenue and earnings largely to the credit crisis, which caused orders to rapidly dry up or be delayed.

However, Vestas has recently racked up an impressive series of wins with new orders totaling 503 turbines. But, they will be produced so late in the year that the revenue will not be booked until 2011.

Overall, Vestas remains bullish on North America, with CEO Ditlev Engel saying that the company will proceed with an expansion of 3,000 new jobs. He predicted losses in the first half of the year will be more than made up for by profits in the second half. As the European market has becoming increasingly saturated, areas like North America are seen as bright spots for the future expansion of wind power.

In mid 2008, the U.S. moved ahead of Germany to become the world's leading producer of wind energy. Estimates by the American Wind Energy Association say the U.S. could be on track to generate as much as 20% of its electricity from wind by 2030. However, they caution that 2010 could see much smaller growth than last year, with growth perhaps falling back to 2007 levels.

For the immediate future, the outlook for the wind industry, and for operations at Vestas' North American headquarters in Portland look cautiously optimistic.