By John Revill
ZURICH--ABB Ltd. will press ahead with pruning its portfolio but
won't be separating its power and automation businesses, Chief
Executive Ulrich Spiesshofer said Thursday.
Mr. Spiesshofer, who took over as CEO in 2013, has been under
pressure to improve profitability at the Zurich-based company which
has faced a slowdown in the U.S. and China, its two largest
markets.
The company, the world's biggest maker of power grids, has shed
4.2% from its stock price this year as utilities and the oil and
gas industry delayed expensive projects. Its power systems
business, which makes parts for power plants, has also been a drag
on the ABB's performance in recent quarters and is much less
profitable than its industrial automation business which makes
robots and motors for use in factories.
"ABB is a company that has carried out responsible portfolio
management over the last 20 years; not many companies have changed
their portfolio as actively as we have done," said Mr. Spiesshofer
in an interview.
Since he took over, the company has raised $1 billion by selling
off fringe operations like ventilation, generator, and steel
products businesses to focus on faster growing parts of the
company, a trend that would continue, the executive said.
"You can expect we will drive portfolio development in line with
our strategy, we will change the center of gravity of ABB, and
focus more on the high growth segment," Mr. Spiesshofer said
without giving details.
Mr. Spiesshofer said China, the U.S, and the oil and gas
industries had been tough during the three months to June 30.
He expected an improvement in China in the second half of the
year, and was also looking at the potential in Iran, where
sanctions are due to be lifted following a deal on the Middle
Eastern country's nuclear program.
"Iran is a very large country with large infrastructure needs;
ABB is ready to act the moment the market opens," said Mr.
Spiesshofer. "We are ideally positioned to serve the country, from
generating power, to power transmission, to automation and public
transport."
He was speaking as ABB reported an 8% decrease in net profit in
the three months to June 30. Profit slipped to $588 million, from
$636 million in the same period a year earlier. The figure beat
analyst expectations of $572 million.
Revenue fell to $9.17 billion, from $10.19 billion, better than
expectations of $9.04 billion.
Analysts applauded the results, saying the company was doing
well in a difficult environment. The stock also reacted positively,
gaining 3% to trade at 20.26 francs on the Swiss Market Index.
Write to John Revill at john.revill@wsj.com
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