Natural gas and wind power have been the leading new generation sources in recent years, so it’s no surprise that a leading manufacturer showcased those businesses in a recent analysts’ conference call.
General Electric (NYSE: GE) held its first quarter 2012 earnings conference call on April 20, discussing overall company results.
“We had a strong renewables quarter. Revenues of $1.5 bn were up 30%. We shipped 611 wind turbines versus 366 last year, and that was about 200 more than we planned in the quarter,” CFO Keith Sherin said. “Thermal revenue of $1.8 bn was up 2%. So we shipped 35 gas turbines versus 32 last year,” Sherin said, according to a transcript posted on the web site, Seeking Alpha.
Overall, energy results were strong, he added. “We continue to see strong orders growth. Orders of $7.7 billion were up 21%. Equipment orders of $4.1 billion were up 29%. We had orders for 696 wind turbines versus 327 in the first quarter of last year. Thermal orders of $700 million were down 7%. We had orders for 23 gas turbines versus 27 in the first quarter of ’11,” Sherin said.
The looming expiration of the production tax credit has caused wind project developers to accelerate construction schedules to have plants functioning by year’s end. That has impacted equipment orders, with manufacturers needed to deliver turbines in 2012.
”And I’d say wind is just a wildcard given how much volume could actually take place in 2012 just based on the strength of the market,” CEO Jeff Immelt said.
Sherin said the company expects to deliver about 137 gas turbines this year, and is expecting volumes to be strong this year. And a recovery has been aided by a stronger pricing environment.
“If you look at thermal last year, it was down 6% in the first quarter, 10% in the second quarter, 7.5%, 12.5% in the fourth quarter. To go to 1.1% down and to be positive including the service business, I think that shows that we’ve been saying that the discussions around commitments on gas turbines have been healthy, that pricing was stabilizing, and so it’s the start of a turn for us and I am reasonably encouraged by it,” he said.