Schneider Electric (EU:SU)
Historical Stock Chart
1 Year : From Nov 2018 to Nov 2019
--Shares in ABB up more than 5%
--Chairman Peter Voser to become interim CEO after Ulrich Spiesshofer resigns
--First-quarter earnings ahead of expectations
By Nathan Allen
Shares in ABB Ltd. (ABBN.EB) rose Wednesday morning after the Swiss engineering company posted better-than-expected first-quarter earnings and said Chief Executive Ulrich Spiesshofer has stepped down.
ABB's net profit for the January-March period dropped 6% to $535 million but easily outstripped a FactSet-compiled consensus of $431.5 million. Orders edged up 1% to $7.61 billion, while revenue climbed 6% to $6.85 billion.
However, the main focus is on the surprise resignation of Ulrich Spiesshofer, a 14-year veteran of the company with more than five years in the top job.
At 0802 GMT ABB was trading 5.6% higher at 21.24 Swiss francs ($21.12).
While Mr. Spiesshofer had some success in pruning the group's portfolio and overseeing a $6.4 billion sale of its power-grids unit, he came under fire from shareholders--notably activist investor Cevian Capital--for failing to deliver a more radical restructuring.
Under his leadership, the company's share price remained subdued, falling around 0.8% since he started, compared with gains of 21% at rival Siemens AG (SIE.XE) and 18% at Schneider Electric SE (SU.FR) over the same period.
Chairman Peter Voser, a former CEO of Royal Dutch Shell PLC (RDSB.LN), will become ABB's interim CEO until a replacement for Mr. Spiesshofer has been found.
Citi analyst Martin Wilkie said the leadership shakeup is likely linked to a broader shift in ABB's strategy, rather than any dissatisfaction with earnings, and will be welcomed by investors.
"The company is moving from a phase of strategy definition to execution, and the departure looks linked to the entering of this new phase," he said.
Write to Nathan Allen at email@example.com
(END) Dow Jones Newswires
April 17, 2019 04:19 ET (08:19 GMT)
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