ABB Reports Lower Profit, Wary on Energy-Sector, China Outlook - Update
April 20 2016 - 1:19AM
Dow Jones News
By John Letzing
ZURICH--ABB Ltd. reported an 11% decline in first-quarter net
profit and warned of a challenging mix of declining energy prices
and slower economic growth in China.
The Zurich-based power-grid and automated-equipment maker said
on Wednesday that net profit fell to $500 million in the three
months to end-March from $564 million in the same period last year.
Revenue fell 8% to $7.9 billion, the company said.
Analysts had expected net profit of $437 million, and $8.05
billion in revenue.
ABB said a stronger U.S. dollar helped to cut into its reported
revenue figure in the period by about 5%.
Recent struggles for the oil and gas industry, in addition to
weaker demand in developing economies such as China--a key market
for ABB--have hindered the performance of a number of international
industrial equipment makers such as General Electric Co. and
Siemens in addition to ABB.
ABB said first-quarter orders declined 11%, to roughly $9.3
billion. The company said it had a difficult comparison to the
"significant large orders" booked in the same period last year.
Looking ahead, ABB cited "a mixed picture with continued
uncertainty."
The company said it expects further growth in the Chinese
economy this year, albeit at a slower pace than last year. Growth
remains "modest" in Europe, ABB said, which has combined with
geopolitical tensions in other parts of the world to create
difficult conditions.
ABB Chief Executive Ulrich Spiesshofer said in a statement that
the company's strategic portfolio review of its power grids
division continues, and that ABB plans to disclose related details
in October.
Write to John Letzing at john.letzing@wsj.com
(END) Dow Jones Newswires
April 20, 2016 02:04 ET (06:04 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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