ABB Profit Beats Expectations -- 2nd Update
April 20 2016 - 5:29AM
Dow Jones News
By John Letzing
ZURICH--Swiss power-grid and automated-equipment maker ABB Ltd.
said its first-quarter net profit fell less than expected, despite
declining energy prices and slower economic growth in China.
Profit was bolstered by a $200 million bump in cash flow from
operations, Zurich-based ABB said. Shares of ABB rose more than 3%
in morning trading, when most blue chip stocks in Switzerland were
in decline.
Net profit fell 11% to $500 million in the three months to
end-March from $564 million in the same period last year, ABB said.
Revenue fell 8% to $7.9 billion, the company said. Analysts had
expected net profit of $437 million, and $8.05 billion in
revenue.
ABB said a stronger U.S. dollar cut into its reported revenue
figure in the period by about 5%.
During a conference call with reporters, ABB Chief Executive
Ulrich Spiesshofer cited the company's success in boosting profit
margins, cash flow, and its backlog of orders despite tough market
conditions in the quarter. He also deemed the company's bid to
turnaround its power grids business "successful."
Analysts at J. Safra Sarasin noted that ABB topped expectations
for both profit and orders in the quarter, and called its overall
results for the period "solid."
Recent struggles for the oil and gas industry, in addition to
weaker demand in developing economies such as China--a key market
for ABB--have hindered the performance of a number of international
industrial equipment makers such as General Electric Co. and
Siemens in addition to ABB.
ABB said first-quarter orders declined 11%, to roughly $9.3
billion. The company said it had a difficult comparison to the
"significant large orders" booked in the same period last year.
Looking ahead, ABB cited "a mixed picture with continued
uncertainty."
The company said it expects further growth in the Chinese
economy this year, albeit at a slower pace than last year. Growth
remains "modest" in Europe, ABB said, which has combined with
geopolitical tensions in other parts of the world to create
difficult conditions.
ABB Chief Executive Ulrich Spiesshofer said in a statement that
the company's strategic portfolio review of its power grids
division continues, and that ABB plans to disclose related details
in October.
Write to John Letzing at john.letzing@wsj.com
(END) Dow Jones Newswires
April 20, 2016 05:14 ET (09:14 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
ABB (NYSE:ABB)
Historical Stock Chart
From Mar 2024 to Apr 2024
ABB (NYSE:ABB)
Historical Stock Chart
From Apr 2023 to Apr 2024