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Breeze Falters for Wind Turbine Maker

When increased competition depressed Vestas Wind Systems' market share, investors balked. Still, the forecast looks fair for the Danish company

Chalk one up to the rising power of renewable energy. On Feb. 27, Denmark's Vestas Wind Systems (VWS.CO)—the world's largest wind turbine manufacturer—posted a 120% rise in its annual operating profit, to $664 million, on the back of strong demand from Europe, the U.S., and China.

The 2007 results slightly beat market expectations, but shares in the Copenhagen-based company plummeted 8.6% as a five percentage point drop in the firm's global market share, to 23%, took many analysts by surprise. (Shares ended the day down 5%.) Despite the Feb. 27 slump, Vestas shares are up 90% over the past 12 months due to growing demand for wind energy (BusinessWeek.com, 9/21/07) that could drive 20% annual growth for the industry from now until 2020.