Shares rise as much as 7 pct; analysts had feared worse.
Vestas forecast a modest decline in profit margins and steady sales on Wednesday, easing investor worries about the impact of growing competition and falling government subsidies on the world's biggest wind turbine maker.
Shares in the Danish company, which had dropped around 20 percent over the past year, rose 7 percent in early trading.
"It is a sigh of relief," said Sydbank (SYDB.CO)
analyst Jacob Pedersen, echoing other analysts who pointed to better-than feared guidance for both 2018 and the longer term.
Vestas said it expected its 2018 operating profit margin to fall to 9-11 percent on sales of 10-11 billion euros ($12.4-$13.6 billion), compared with last year's margin of 12.4 percent and sales of 10.0 billion.
It also updated its long-term guidance to an operating margin of at least 10 percent from previously "best-in-class margins," and kept its goal to be market leader in revenue.
Wind turbine makers have been hit hard by an industry switch to awarding contracts via auctions, which has forced down prices, as well as a reduction in government subsidies.
"Generally speaking we see tougher markets so that's reflected in our outlook," Vestas chief executive Anders Runevad told Reuters.
Vestas, which bounced back from the brink of bankruptcy in 2012, said its fourth-quarter order intake came with an average selling price of 740,000 euros per megawatt (MW), compared with 800,000 euros in the third quarter and below the 800,000 euros expected by analysts.
"What we see now is that energy prices for wind are rapidly coming down driven by auctions and that puts pressure on the whole (supply) chain in the industry, but the good news is that we see now that wind in more and more markets is the cheapest form of energy," Runevad said.
At 0925 GMT, Vestas shares
were up 4 percent at 421.80 Danish crowns.
The company's fourth-quarter orders came in at 3,844 MW with a value of 2.9 billion euros, below the 4,375 MW worth 3.5 billion expected by analysts.
Earnings before interest and tax (EBIT) of 385 million euros also fell short of the 424 million forecast by analysts in a Reuters poll.
Reporting by Stine Jacobsen