ABB ABB Ltd

(Adds further CEO comment, detail)

 
   By Brian Blackstone 
 

ZURICH--Swiss power- and automated-equipment maker ABB Ltd. (ABB.SK) said Thursday that second-quarter profit fell 31% due to restructuring expenses, and cited an uncertain global economic outlook complicated by the U.K. decision to leave the European Union.

Still the profit exceeded analyst expectations, boosting the shares nearly 2% at 0900 GMT.

Zurich-based ABB said net income was $406 million in the three months ended June, compared with $588 million a year earlier. Analysts had expected profit of $393 million.

Revenue fell 5% to $8.68 billion from $9.17 billion. Analysts had expected revenue of $8.8 billion.

ABB "is operationally executing very well…while fighting an uphill battle on several fronts," said analysts at Vontobel Research. in a note. "However, we note the considerable progress made in most divisions as a result of strict cost discipline."

"Our continued focus on high-growth segments dampened the impact of challenging markets like the process industries," said ABB Chief Executive Ulrich Spiesshofer. "We are improving our cost and capital structure, as well as our productivity, and shaping a leaner, more agile ABB in a disciplined way."

Economic and geopolitical developments "are signaling a mixed picture with continued uncertainty," the company said.

"Some macroeconomic signs in the U.S. remain positive and growth in China is expected to continue, although at a slower pace than in 2015," it said, adding that the outlook is also being affected by "increased uncertainties relating to Brexit in Europe, and geopolitical tensions in various parts of the world."

In a conference call with reporters, Mr. Spiesshofer said that despite the Brexit vote, the company is taking a business-as-usual approach. "If we need to do investments in the U.K.. we will continue to do that," he said, adding that ABB technology can help companies there stay competitive.

The company said that demand in Europe was strong during the second quarter, while orders in the Americas region slid. Demand in Asia, the Middle East and Africa was mixed, with strong demand from China and India offset by weaker figures from other parts of the region.

Vontobel analysts said: "We believe that a little help of macro tailwind would lead to a tremendous boost in profitability at ABB."

Write to Brian Blackstone at brian.blackstone@wsj.com

(END) Dow Jones Newswires

July 21, 2016 05:40 ET (09:40 GMT)

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