ABB Profit Beats Expectations on Sluggish Sales
Swiss power-grid and automated-equipment maker ABB Ltd. (NYSE: ABB – $20.92) said its first-quarter net profit fell less than expected, despite declining energy prices and slower economic growth in China. A strong U.S. dollar cut into sales, but ABB was able to reported a net profit of $500 million, down 11% from a year ago, and per share earnings of $0.23 were slightly higher than most estimates. Revenue fell 8% to $7.9 billion vs. a consensus of $8.05 billion in revenue. 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.” ABB also said first-quarter orders declined 11%, to roughly $9.3 billion as the company had a difficult comparison to the “significant large orders” booked in the same period last year. The company said it expects further growth in the Chinese economy this year, albeit at a slower pace than last year, but growth remains “modest” in Europe. Separately, ABB announced orders worth more than $300 million to supply advanced converter transformers for two long-distance ultra-high-voltage direct current transmission links totaling up to 10 gigawatts of capacity in China.
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