ABB net income up 41% as top line growth accelerates
ABB reported a solid double digit rise in orders, revenues and earnings, driven by strong industrial efficiency demand, continued utility investment in grid interconnections and upgrades, and a more competitive cost base.
Net income rose 41 percent to $655 million while operational EBITDA amounted to approximately $1.3 billion, a 37-percent increase over the same quarter in 2010. The operational EBITDA margin was 15.7 percent compared to 13.8 percent on the strong revenue increase and the success of ongoing cost savings.
Orders increased 25 percent and were higher in all divisions. Base orders (below $15 million) were up in all divisions for the second consecutive quarter to reach the highest level since the second quarter of 2008. Revenues increased 18 percent—the strongest growth in two years—on execution of the large order backlog and higher short-cycle product sales.
Earnings before interest and taxes (EBIT) increased 43 percent to approximately $1 billion. EBIT includes $107 million of charges related to the Baldor acquisition.
“Our results show we’re gaining traction in both growth and profitability,” said Joe Hogan, ABB’s CEO. “We are successfully targeting growth areas and the Baldor acquisition made a great contribution to the results. Our lower cost base also continued to pay off by lifting profitability in our growing businesses and holding margins steady where we’re still waiting for recovery.”
“Looking ahead, we expect continued strong industrial demand to support our early cycle businesses and we see positive signs that our infrastructure-related businesses in both power and automation are on track for recovery later this year,” Hogan said. “ABB’s long-term key growth drivers remain intact—the increasing need for energy efficiency, industrial productivity and more reliable power infrastructure in both the mature and emerging economies.”
View the full report on ABB’s site.
– Edited by Gust Gianos, Plant Engineering, www.plantengineering.com