ABB of Zurich, Switzerland reported a 15 percent increase in orders, 3 percent revenue growth, and net income growth of 4 percent for the first quarter of the year, compared to the same period in 2014. The company’s operational EBITA margin remained steady, earnings per share for the first quarter were $0.24, and its operational earnings per share (on a constant current basis) were $0.29.
During the first quarter, ABB’s revenues grew 3 percent on a like-for-like basis (down 10 percent in US dollars), mainly reflecting the successful execution of the stronger order backlog in most businesses. The appreciation of the US dollar during the first quarter of the year resulted in a negative translation impact on reported revenues of 10 percent; divestitures had an impact of 3 percent, according to the company. Revenues were steady to higher in all divisions except process automation, where the lower opening order backlog in the oil and gas and mining businesses resulted in a modest revenue decline.
“We delivered a solid first quarter in which we grew net income and increased cash flow, in line with our commitment to drive profitable growth and accelerate sustainable value creation,” said CEO Ulrich Spiesshofer, in the press release.
During the quarter, ABB’s net income increased 4 percent to $564 million, compared to the same period last year. Basic earnings per share (EPS) amounted to $0.25 in the first quarter compared to $0.24 in the same quarter a year earlier. ABB reported positive cash flow from operating activities of $53 million in the first quarter compared with a negative cash from operations of $45 million in the same quarter of 2014, partly the result of measures to achieve more evenly distributed cash generation through the year and timing of project cash flows in power systems.
According to the company press release, long-term demand outlook across its three major customer sectors—utilities, industry, and transport and infrastructure—remains positive. Current oil prices and foreign exchange translation effects are expected to continue to influence the company’s results.
“In a challenging environment, we doubled large orders and kept base orders steady,” Spiesshofer pointed out. “We grew orders in our three largest countries—the US, China and Germany—on a like-for-like basis and won key projects due to our combined power and automation offering, reflecting our competitive advantage. We brought revenue back to growth, benefiting from our order backlog and strong focus on growth segments in a difficult market overall.”
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