May 8 (Bloomberg) -- Vestas Wind Systems A/S, the world's biggest wind-turbine maker, rose to a record after first-quarter net income almost doubled on price increases.

Vestas, based in Randers, Denmark, gained 61 kroner, or 12 percent, to 568 kroner in Copenhagen trading, the highest since the stock was first sold in 1998.

A global drive to reduce power generation from fossil fuels, blamed for global warming, spurred orders at Vestas and competitors including Spain's Gamesa Corp. Delays in getting components will persist for ``some years,'' Vestas said today.

``It's positive that they're raising prices, and the working capital numbers are also good news,'' Soeren Moeller Soerensen, the head of equities trading at Copenhagen-based Amagerbanken A/S, said by phone today.

Net income rose to 33 million euros ($56 million) from 17 million euros a year earlier, Vestas said. The company was expected to earn 35.5 million euros, according to the median estimate in a Bloomberg survey of five analysts. Revenue declined 8 percent to 701 million euros.

The company expects to have less money tied up in the production process. Working capital will decline to 10 percent of revenue by the end of 2008, compared with a previous forecast of 15 percent.

Forecast Revenue

Chief Executive Officer Ditlev Engel said gains in the price of oil, which soared to more than $123 a barrel this week, are ``obviously improving the outlook'' for the company. Still, he said the distribution of earnings will ``fluctuate'' and that the company expects 70 percent of this year's projected revenue to fall in the third and fourth quarters.

The cost of land-based rotors rose 74 percent to 1.38 million euros in the past three years, according to BTM Consult APS, a Danish wind power consultant. The price for offshore turbines rose 48 percent to 2.23 million euros a megawatt.

Vestas put its 3-megawatt offshore turbine back on the market this month after suspending sales last year because of faults to the gear box, Engel said in an interview in London.

``Material prices have gone up significantly,'' he said. ``Fortunately, we have managed to alleviate that with an increase in prices for the products.'' He declined to say by how much the company raised prices in the quarter. The rise in earnings was also attributed to more efficient operations.

Supply Lag

Vestas kept its full-year revenue outlook of 5.7 billion euros and expects 70 percent of its sales in the second half.

``The overall demand pressure on the industry persists, and there are still long lead times for a number of key components'' lasting as long as 15 months, the company said. There will be ``some years before supply will match demand,'' even as new manufacturers start up, especially in China, Vestas said.

The industry is helped by record oil prices, which Goldman Sachs Group Inc. analysts this week said may surge to as much as $200 a barrel within two years.

Vestas's order backlog at the end of March rose 20 percent to 4.8 billion euros. The company said its profit margin on earnings before interest and taxes will ``continue to improve to 10-12 percent'' from 9.1 percent in 2007.

Vestas on Feb. 4 said it succeeded in shortening delivery times for components. The company, whose turbines have as many as 8,000 parts, started a plan to improve delivery times after recording its biggest loss in 2005.

The company said today it's investing 160 million euros in a U.S. factory for towers to tap into rising demand for wind energy in the world's biggest energy market. The Colorado-based factory will have a capacity of about 900 towers a year when commissioned in 2010, Engel said.

The company is on course to supply 10,000 megawatts in 2010, more than double the 4,974 installed last year, Engel said.

To contact the reporters on this story: Adam L. Freeman in Rome at afreeman5@bloomberg.netLars Paulsson in London at lpaulsson@bloomberg.net

Last Updated: May 8, 2008 11:52 EDT