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GE 'overplays' wind's role in bad results

UNITED STATES: GE may be blaming its wind business excessively for its poor results, according to analysts speaking to Windpower Monthly following the firm's announcement of its financial results last month.

"Wind's taking a lot of the blame - it's awfully convenient right now," said Dan Holland of investment experts Morningstar. '"The environment (for wind) is bad, but perhaps not that bad."GE does not separate out financials for its various distinct energy businesses such as wind power, solar and natural gas.

Brian Langenberg of Langenberg & Co agreed that GE could have over-simplified the picture in relation to wind's affect on its results. "The fact is you are not going to see a lot of gas turbine shipments into the US before 2014." GE Energy's largest business is selling gas turbines, with renewables its second largest.

Still, GE's wind business dragged down the conglomerate's third-quarter profitability, CEO Jeff Immelt told analysts. Orders for GE wind turbines were 241 in the third quarter of 2012, compared with 781 during the same period in 2011.

No data

In an indication of the rush that exists to complete US projects before the production tax credit (PTC) expiration, the conglomerate shipped 1,014 of its wind turbines, up from 633 a year earlier in the third quarter. No data on turbine pricing was given.

GE's chief financial officer Keith Sherin predicted that the company's global wind revenues could fall 40% in 2013 if the US Congress allows the PTC to lapse.

That is the equivalent of $325 million less in net after-tax earnings.

US-based GE has relied heavily on domestic sales since entering the wind industry in 2002 but is now prioritising Brazil, Canada and Asia.

"GE's been a juggernaut (in the US market), but it is making strides in diversifying," commented Dan Shreve of Make Consulting.

Indeed 75% of GE wind turbine commitments - or 'early orders' - so far this year have been from outside the US, said a spokeswoman for GE Lindsay Theile.

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