A focus on profitable organic growth and several related strategic initiatives helped buoy Zurich-based ABB’s orders by 28 percent during the third quarter, compared to the same period in 2013. The firm reported that its base orders have increased steadily over the last five quarters and that its cost reduction and cash generation initiatives are on track.
For the third quarter, ABB’s revenues were 6 percent lower than they were during the third quarter of 2013 and its operational EBITDA margin was 14.3 percent in the third quarter versus 15.7 percent a year earlier. The margin reflected lower revenues and the result in Power Systems (PS).
“In PS, we achieved significant milestones in project execution, continued to de-risk the portfolio and implement a new business model for offshore wind projects,” Spiesshofer said. “The division broke even in the quarter. We continue to drive our focused action program to complete the turnaround and address the remaining challenges ahead. Overall, our efforts on relentless execution, including our cost savings program, are on track.”
According to ABB, the company’s total orders rose to $11.2 billion and included a power transmission link in Europe, a mining automation project in the Americas, and a gas treatment plant in Africa. “Our program for profitable organic growth has successfully created healthy order momentum across all regions,” said CEO Ulrich Spiesshofer, in a press release. “I am encouraged to see attractive large project wins and five consecutive quarters of base order growth.”
Utility demand for power distribution solutions was steady in the quarter while investments in power transmission systems remained selective, ABB reported. Industrial demand varied by region and end market, with positive demand in oil and gas and general industry. Demand in the mining sector was stable at low levels. Infrastructure and construction markets were mixed, while rail and marine transportation demand was positive.
For the third quarter, ABB’s net income was $734 million and the company’s basic earnings per share was $0.32. ABB initiated the $4-billion share buyback program announced in September and purchased shares with a value of approximately $350 million during the quarter.
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