There's no way to sugarcoat it: This has been a miserable year for wind turbine manufacturers. The renewable energy businesses of all three of the leading Western players -- Vestas (VWDRY 3.35%), Siemens Gamesa (GCTAY), and General Electric (GE 1.12%) -- are set to lose money in 2022.

That said, there's clear evidence of a turnaround in progress, and investors should look for a gradual improvement in the sector's fortunes through 2023. Here's why. 

Not the year they expected

A quick look at the guidance these three wind power companies gave at the start of their relative fiscal years (Siemens Gamesa's fiscal year concluded at the end of September) compared to their latest results and outlooks demonstrates what a challenging year its been.

Siemens Gamesa lost money in its fiscal 2022, and Vestas is on track to do the same -- but both predicted profits at the start of their financial years. Meanwhile, GE Renewable Energy is expected to lose a whopping $2 billion rather than the $600 million loss at the midpoint that it guided for at the start of the year. 


Original Full-Year 2022 Outlook

Latest Outlook/Results


Revenue of 15 billion to 16.5 billion euros, adjusted EBIT margin of 0%-4%

Estimated revenue of 14.5 billion to 15.5 billion euros, adjusted EBIT margin of negative 5%

GE Renewable Energy

Low single-digit percentage revenue growth, operating loss of $500 million to $700 million 

Estimated loss of $2 billion

Siemens Gamesa

Revenue of 9.5 billion to 10 billion euros, adjusted EBIT margin of 1%-4%

Actual revenue of 9.8 billion euros, adjusted EBIT margin of negative 5.9%.

Data source: Company presentations. EBIT=earnings before interest and taxation.

What went wrong in 2022

The industry was hit with a perfect storm this year. Soaring raw material prices, rising transportation costs, and supply chain disruptions and component shortages pressured margins as all three continued to work through orders secured years ago in a much more benign environment. Throw in rising interest rates and their negative impact on financing costs, and it's not surprising that conditions deteriorated so badly. 

Consequently, all three have announced job cuts, with GE Renewable Energy laying off around 20% of its U.S. onshore wind workforce. Siemens Gamesa changed its management and its operating model, and it has a turnaround strategy in place. Meanwhile, the man primarily responsible for the turnaround at GE Power, Scott Strazik, is now charged with turning around GE Renewable Energy. 

Turnaround plans

The turnaround plans at fierce rivals Siemens Gamesa and GE Renewable Energy have much in common. Both are determined to cut costs and focus on competing in their core geographies where they can secure profitable orders. 

It all points to improved pricing discipline. In short, wind power farms will have to get used to paying higher prices for wind turbines. GE, Siemens Gamesa, and Vestas will seek to "muddle through" orders secured at relatively low prices while securing new orders at higher prices. 

The good news is that's exactly what's happening. GE's management has noted improved pricing of orders. Siemens Gamesa's average selling price of the onshore order intake was 820,000 euros per megawatt in 2022 compared to 650,000 euros per megawatt in 2021. 

Data from industry leader Vestas also reflects the improvement in pricing across the industry. As you can see below, there's been a significant improvement in the pricing of new orders at Vestas, which speaks well across the industry. All three companies are trying to improve pricing, and the data from Vestas is a clear sign of improvement that is highly likely to be mimicked at GE Renewable Energy. 

Vestas pricing of orders

Data source: Vestas presentations. 

Has GE Renewable Energy turned the corner?

There's no quick fix for GE's most problematic business. However, the improvement in pricing across the industry and the optimism among buyers generated by the Inflation Reduction Act -- which extended tax credits for wind farms -- suggest a bottoming process is firmly in place. 

As such, don't be surprised if GE Renewable Energy bottoms out before the end of next year and if all three of these companies exit 2023 in a lot better shape than they are entering it.