Broadwind raises revenue alarm

US fabrication outfit Broadwind Energy has announced that revenue for the final quarter of last year is expected to be below company forecasts.

The Illinois-based company blamed “substantial production issues” and one-off costs associated with an “unprofitable” contract at its Abilene tower facility. Labor overruns, inventory charges and other manufacturing inefficiencies at the facility were also cited.

According to a statement on Friday, Broadwind now expects consolidated fourth-quarter revenue to be approximately $38 million, down from earlier estimates of $45 million.

The company also said that consolidated Q4 operating losses would be around $11 million, versus a guidance of a $4-5 million operating loss.

Broadwind interim CEO Stephanie Kushner said: “We can see with hindsight that this contract was a poor fit for the site layout and organizational maturity of our Abilene plant. 

“As a result, our fourth-quarter production rate was just one-quarter of our design capacity. This drove significant labor inefficiencies and very low overhead absorption.”

He added: “In early January, we made the decision to curtail this production run in Abilene and produce the remaining towers from this order in our Manitowoc facility. 

“We have analysed past performance in the Abilene plant, implemented upgraded methods and have now begun a new production run for a known product line with a long-term customer. Today the plant is again producing at or near the plant design rate.”

Image: Wind turbine tower (Broadwind Energy)