ABB points to improving order situation after quarterly profit beat
The maker of industrial robots and electric car charging stations expects the fall in orders caused by the pandemic to improve in the third quarter, although it said revenues would take longer to recover
ZURICH: Swiss engineering firm ABB said on Wednesday its order situation could improve in the coming months, suggesting there was some light amid the gloom surrounding the industrial sector caused to the coronavirus crisis.
The maker of industrial robots and electric car charging stations expects the fall in orders caused by the pandemic to improve in the third quarter, although it said revenues would take longer to recover.
“ABB expects some improvement in year-on-year order decline already in the third quarter,” the company said, after posting better-than-expected results for the April to June period.
“Revenues are expected to remain strongly impacted on a year-on-year basis, at best recovering somewhat in the fourth quarter,” it added.
Chief Executive Bjorn Rosengren said the company’s second quarter had been “heavily impacted by COVID-19.”
The crisis has hit demand from many customers, particularly in the oil and gas, power generation and automotive industries, ABB said.
ABB’s operational earnings before interest, tax and amortisation (EBITA) fell 21% to $651 million, but beat the $446 million expectation in a company-gathered poll. Revenue fell 14% to $6.15 billion, also better than the $5.61 billion consensus.
Orders fell 18%, with the United States, ABB’s biggest market and the country worst hit by the crisis, seeing orders falling 25%.
Europe also struggled, but China had started to improve, with orders down only 3% following a 21% slump in the first three months of the year.
Net profit jumped to $319 million from $69 million a year earlier, when ABB was hit by a $470 million charge it took to ditch its struggling solar inverter business.
Analysts said ABB’s outlook and the earnings beat was positive news, with the stock indicated 1.7% higher in premarket activity.
Still, the problems associated with COVID-19 would remain, said Rosengren, who joined ABB in March from Sandvik.
“A lot of uncertainty remains and we still see some challenging quarters ahead,” he said as ABB launched its previously announced share buyback programme.
Source: reuters
