ABB sees revenues, net income rise in third quarter
Technology company cautiously optimistic about future growth
ABB reported double-digit increases in revenues, earnings before interest and taxes (EBIT), net income and cash flow in the third quarter of 2008 as the company continued to improve its operational performance.
EBIT grew 25% to $1.3 billion, including a net expense of approximately $100 million, equivalent to roughly one percentage point of EBIT margin, resulting from the mark-to-market treatment of hedging transactions.
Net income rose 26% to $927 million and cash from operations increased to $1.1 billion.
Revenues grew 22% (local currencies: 16%) on the successful execution of the strong order backlog.
Orders received increased 7% (local currencies: 1%) to $8.9 billion. Orders for power equipment showed continued robust growth in all regions and orders for industrial automation products also increased at a double-digit pace in most markets. Large project orders declined significantly, reflecting in part a comparison with a very strong quarter a year ago. In addition, customers’ decisions on a number of industrial and infrastructure investments have been delayed as a result of the recent market uncertainty.
“Our solid revenue, earnings and cash flow growth in the third quarter demonstrate our ability to successfully execute across all of our businesses,” said Joe Hogan, ABB’s chief executive officer. “We continue to benefit from long-term trends to expand and upgrade power infrastructure, improve industrial productivity and lower environmental impact.
“It’s too early to say how the recent financial-market turmoil will impact our markets in the short term but our operational strength and flexibility, leading technology, competitive cost base and solid balance sheet put us in a good position to meet a tougher market. We are on target to deliver on our 2008 growth guidance.”