Swiss engineering firm ABB, Ltd. (NYSE: ABB – $24.27) reported first-quarter order growth across all units, as well as increased sales and stronger margins. Total orders rose 6% to $9.8 billion for the quarter, thanks in part to an 11% rise in orders booked by the Robotics and Motion unit. First-quarter revenue was $8.63 billion, up 1% on year and 3% ahead of consensus, while net profit fell to $572 million from $724 million a year earlier. Earnings per share came in at the estimate of $0.31 vs. $0.28 last year. The trend for large orders (> $15 million) was week for the period and will most likely continue through 2018, according to the company. Small orders, however, provided much of the revenue momentum. ABB said the lower profit was due to a tough comparison effect with the first quarter of 2017, when the company booked gains from the divestment of its cables business. Stripping out the effects of the transaction, ABB’s net profit grew 10% to $699 million.
In the Robotics and Motion and Electrification Products divisions, revenues were well-supported by continued solid order growth. This was tempered by steady revenues in the Industrial Automation business and lower revenues in the Power Grids segment due to the lower order backlog at the end of 2017 in these divisions. Service revenues were 8% higher (15% in US dollars) and represented 18% of total revenues, the same as last year. Earlier this week, ABB said it has been selected by Electrify America to supply its Terra HP charging stations for its 10-year electric vehicle infrastructure project in the United States. Electrify America plans to place hundreds of charging stations within and around metropolitan areas and along multiple nationwide highway corridors.
Looking ahead, full year earnings should be about $1.34/share and next year is viewed at $1.56. The shares, yielding 3.4%, can be held for recovery.