Swiss engineering company ABB Ltd. (NYSE: ABB – $20.21) said third-quarter net profit and revenue fell, largely due to weaker market conditions hitting its robotics and automation business. Revenue for the period declined 3% to $6.89 billion, compared with $7.10 billion the previous year. The company restated the 2018 figures to reflect the sale of its power-grids business. ABB’s electrification and motion businesses grew in revenue, while robotics and discrete automation as well as industrial automation declined, with the latter negatively impacted by the revaluation of a project. Net profit for the period was $515 million, compared with $603 million a year earlier. Despite the shortfall, ABB beat analyst expectations for net profit of $363 million. On a per share basis, ABB posted an adjusted $0.33 compared to $0.34 last year, but eight cents above Street views. The shares are moving higher in today’s trading by about 3.8% following the revenue and earnings beat.
As expected, ABB remained cautious, with a mixed outlook for Europe and China and a weakening one for the U.S. The company said, however, it continues to expect slight revenue growth and improved operating margins. ABB has simplified its structure by creating four divisions. The company now classifies its businesses under: Electrification, Industrial Automation, Robotics & Discrete Automation and Motion. Each segment has full control of its own operations, research and development and territories. This restructuring is in line with ABB’s growth strategy, which entails an increased focus on digital industries. Although the stock, yielding over 4%, has under-performed since entering the conservative candidate list, it remains well suited to conservative income seeking investors with a long-time horizon.