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ABB says broad economic signals are positive

Major Swiss-listed manufacturing and technology company ABB (SWX: ABBN) has reported modest growth in its business in the June quarter, but says macroeconomic signs are “trending positively in Europe and the United States, with growth expected to continue in China”. A 30% rise in net income, compared year on year, of US$681 million was achieved on 1% revenue improvement to $8,889 million.
ABB says broad economic signals are positive ABB says broad economic signals are positive ABB says broad economic signals are positive ABB says broad economic signals are positive ABB says broad economic signals are positive

Staff reporter

ABB, which has 147,000 employees in more than 100 countries and derives about 6% of global revenues from mining and metals customers, says key business risks are rising geopolitical uncertainties and fluctuating oil prices and foreign exchange, but "the overall global market is growing".

"The attractive long-term demand outlook in ABB's three major customer sectors - utilities, industry and transport and infrastructure - is driven by the Energy and Fourth Industrial Revolutions," the company said this week.

"ABB is well-positioned to tap into these opportunities for long-term profitable growth with its strong market presence, broad geographic and business scope, technology leadership and financial strength."

The company said total June quarter orders rose 8% and cash flow from operating activities topped US$1 billion - with "solid cash delivery for the full year expected" - while on the acquisition front ABB completed its $2.6 billion purchase of GE Industrial Solutions.

"We … have started the integration at full speed together with our new colleagues," said ABB CEO Ulrich Spiesshofer.

"In the second quarter, we drove order growth in all divisions and across all regions.

"Through our continued productivity efforts, we delivered margin improvement and double-digit operational EPS growth."

ABB said demand in its utility customer segment was mixed while industrial demand grew well across a broad customer base.

"Process industries, including oil and gas and mining, continued to increase investments, with capex concentrated on upgrading and automating brown-field assets. An ongoing focus on select industries such as food and beverage and automotive, proved beneficial for order momentum, particularly ABB's automation and robotics solutions," ABB said.

"Transport and infrastructure demand was solid, with good orders received for rail electrification, from the construction sector and in specialty vessels."

ABB's share price was up 4.55% early today at US$22.92, capitalising the company at US$47 billion and continuing a strong rise over the past week.