- ABB Orders Beat Estimate as Power Grid Unit Still Struggles
ABB Ltd. reported second-quarter orders that beat estimates, supporting Chief Executive Officer Ulrich Spiesshofer’s claim that the times of sluggish growth are over for the Swiss maker of industrial equipment.
Orders rose 8 percent on a comparable basis to $9.5 billion, Zurich-based ABB said in a statement on Thursday. That was higher that the $9.16 billion estimate of analysts surveyed by Bloomberg yet slightly below last quarter’s record-high order intake.
The results support Spiesshofer in his quest to bolster margins under the company’s current structure. Cevian Capital AB’s calls for breaking up ABB back in 2016 gained renewed attention this month after the Swedish activist’s pressure led to the resignation of Thyssenkrupp AG’s CEO and chairman.
The operational Ebita margin at ABB’s Power Grids business stayed flat compared to last quarter at 9.7 percent, falling short of the target corridor of 10 to 14 percent the company plans to reach in the current financial year.
ABB has been realigning its products to accommodate a global shift to renewable power sources but has refrained from making large-scale divestments like Siemens AG’s spinoffs or General Electric Co.’s $20 billion in asset sales. Last week, ABB completed its $2.6 billion acquisition of GE Industrial Solutions.
With a decline of 15.9 percent year to date, ABB’s stock is performing much worse than its main competitor Siemens AG which gained 1.9 percent over the same period.
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