Bloomberg News

Gamesa Drops Most Since IPO in 2000 as Outlook Cut: Madrid Mover

February 24, 2012

Feb. 23 (Bloomberg) -- Gamesa Corp. Technologica SA slumped the most in Madrid since its initial public offering more than a decade ago after cutting sales estimates for this year.

Gamesa declined by as much as 15 percent, the most since October 2000. The company cut its 2012 sales outlook to 2,800 megawatts to 3,200 megawatts, from 3,000 megawatts to 3,500 megawatts. Gamesa sold 2,802 megawatts last year.

Chairman Jorge Calvet said cheap prices from Chinese rivals and a shortage of funding in the biggest markets will force more of the company’s competitors to quit wind-turbine manufacturing.

“Our peers are slowly disappearing,” Calvet told analysts on a conference call today. “They will not have the financial strength to carry on making investments in R&D.”

Gamesa declined 13 percent to 2.681 euros by 5:07 p.m. in Madrid trading, valuing it at 662 million euros ($881 million).

The company has lost 52 percent of its value in the past year, while Vestas Wind Systems A/S, the biggest wind-turbine maker, has collapsed by 67 percent in Copenhagen trading.

Gamesa’s gross margin will be 2 percent to 4 percent this year, curbed by the cost of introducing products and prices in some emerging markets, it said. The shakeout in the industry may accelerate next year should the U.S. market falter, Calvet said.

“We’re not going to go on a buying spree of any kind,” he said. “We will only intervene if it makes sense.”

--Editor: Tony Barrett, Alex Devine

To contact the reporter on this story: Gelu Sulugiuc in Copenhagen at gsulugiuc@bloomberg.net

To contact the editor responsible for this story: James Ludden at jludden@bloomberg.net


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