Stocks to Consider and Updates

ABB Profit Rises on Order Growth and Productivity Gains

Industrial technology and automation provider ABB Ltd.’s (NYSE: ABB – $22.58) net profit for the second quarter rose 30% in U.S. dollar terms to $681 million, comfortably beating consensus of $627 million. Nevertheless, group revenue of $8.89 billion was up just 1% on a comparable basis, missing consensus of $9.02 billion and ABB’s own guidance of 3% to 6% sales growth. A lack of new orders at ABB’s power-grids units dragged down overall revenue growth, although the long drought is likely to turn positive. The division, which relies on large orders from national power companies and other infrastructure operators, has struggled in recent years amid a slowdown in capital spending in the utility sector. Total company earnings per share was $0.38, up from last year’s $0.30, exceeding Street estimates of $0.36. Looking ahead, the company said: “Macroeconomic signs are trending positively in Europe and the United States, with growth expected to continue in China. The overall global market is growing, with rising geopolitical uncertainties in various parts of the world.” Separately, the Swiss-based firm received orders valued at more than $150 million from Denmark’s Oersted A/S to connect an offshore wind farm to the U.K.’s electricity grid.

       These shares, up nearly 3% on the news, are best suited to patient investors. The stock has been a disappointment over the time it has appeared on the conservative list, however, appreciation potential over the next 3 to 5 years looks promising. And the above-average dividend yield of 3.7% should add to its appeal.

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