Upgraded modelling of expected energy production prompted the lower output forecasts, it said.

"Our current production forecasts underestimate the negative impact of two effects across our asset portfolio, i.e. the blockage effect and the wake effect," the company said.

Growth in average core earnings from operating wind farms through 2023 will remain unchanged at around 20%, however its target for "unlevered lifecycle IRR", its returns on seven wind farm projects, would be reduced to 7.0-8.0% from 7.5-8.5%, it said.

It lowered its projected annual production from 10 European wind farm projects to 48% of maximum capacity from an earlier 48-50%.

"Investors have grown accustomed to (and perhaps therefore taken for granted), that there could come further upgrades to guidance. So the downgrade hits extra hard," Nordnet analyst Per Hansen said.

COST CUTTING

"Not to talk it down, but for me this is not a major setback for the industry at all," chief financial officer Wiinholt said in a conference call with media.

"The industry will still grow, we are in a way more competitive than gas and coal," she added.

European oil majors like Total and Equinor are looking to offshore wind amid pressure from shareholders to show how they plan to align their businesses with global efforts to cut emissions.

In a bid to stay ahead as industry leader, Orsted said it would cut costs by 500-600 million crowns between 2020 and 2022, including one-off reductions and "reductions across our staff functions".

Following the announcement, Orsted issued its third-quarter results report a day ahead of schedule.

It reported an 85% jump in EBITDA to 4.12 billion Danish crowns (£474.93 million), topping the 3.27 billion forecast by seven analysts in a poll provided by the company.

It maintained its outlook for the year - a target it raised in September with earnings before interest, tax, depreciation and amortisation (EBITDA) seen at 16-17 billion Danish crowns, up from a previous 15.5-16.5 billion.

"We had a very strong third quarter with high wind speeds and a ramp-up generation from new wind farms," CEO Henrik Poulsen said in a statement.

Earnings from wind farms in operation increased by 23% in the first nine months to 8.6 billion crowns, it said.

Orsted shares were down 8.44% at 1343 GMT.

(Additional reporting by Jacob Gronholt-Pedersen and Stine Jacobsen)

By Nikolaj Skydsgaard