Update: GE has strong wind Q4
Equipment orders within General Electric’s Power & Water segment rose 81% year-on-year in the fourth quarter, due in part to a “strong” performance from the wind unit.
GE saw wind-related revenues rise 6% in the final quarter of 2013 as it delivered 875 turbines worldwide versus 722 a year earlier.
Results would have been even better had the company not experienced quality problems with blades from an outside supplier.
Roughly 200 turbines that were intended for delivery in 2013 will instead be shipped this year due to “supply chain issues, and project and customer delays.”
This cost GE $500m in wind revenue and $100m in margin in the quarter,GE chief financial officer Jeffrey Bornstein told analysts on a conference call.
The company has been changing out blades that have snapped off at several US wind projects with work to continue into the first quarter. GE still needs to replace 33 blades at the 112MW Echo wind farm in Michigan owned by utility DTE Energy and possibly elsewhere.
GE earlier said that it determined that the root cause of blade breaks at wind farms in Michigan and New York State was a “spar cap manufacturing anomaly.”
The problem does not appear to have affected GE in the marketplace. The company booked 779 turbines in the fourth quarter versus 412 a year earlier, "principally driven by US demand," says Bornstein. Its order backlog on 31 December was up 43% from a year earlier.
"We’re continuing to work through the blade supply issues in wind. And it could have a moderate impact on the first quarter, but it in no way changes our outlook for 2014 for the business or the wind business," adds Bornstein..
GE is forecasting around 3,000 global wind turbine deliveries in 2014 versus 2,100 in 2013.
The US group flagged up its recent 545MW turbine order in Brazil as one of its most important accomplishments of the past quarter.
Having heavily emphasised its intention to diversify away from the US wind market in recent months, GE in November confirmed it had taken home orders totalling 545MW in Brazil’s A-3 wind tender – or 63% of the capacity up for grabs – for its 1.7-100 and 1.85-82.5 turbines.
GE recently confirmed it will supply 38 turbines to a 61MW wind farm in Kenya, and it is known to be growing its sales force within the European onshore wind market.
GE’s headline figures were largely in line with expectations. The company notched up total revenues of $40.4bn in the fourth-quarter of 2013 – slightly ahead of expectations – and $146bn for the full year.
Earnings per share rose 20% year-on-year to $0.53, mirroring analysts’ predictions, while GE’s backlog for equipment and services increased by $15bn since third-quarter 2013.
GE is leaning more heavily on its industrial businesses, having slimmed its exposure to the financial-services market and exited the media business altogether with its sale last year of NBCUniversal.