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ABB sees tough quarters ahead after second-quarter profit beat

Published 22/07/2020, 06:18
Updated 22/07/2020, 06:20
© Reuters.

© Reuters.

By John Revill

ZURICH (Reuters) - ABB (S:ABBN) expects tough quarters ahead marked by the COVID-19 crisis after the Swiss engineering company performed better than expected during its second quarter.

The maker of factory robots and drives said its operational EBITA fell 21% to $651 million (511.59 million pounds), beating the $446 million expectation in a company-gathered poll. Revenue fell 14% to $6.15 billion, but still stronger than the $5.61 billion consensus.

Net profit jumped to $319 million from $69 million a year earlier, when ABB was hit by a $470 million charge it took to ditch its struggling solar inverter business.

Chief Executive Bjorn Rosengren said ABB's second quarter had been heavily impacted by the COVID-19 epidemic, which the company had tried to tackle by reducing costs.

As a result, the operating profit margin of 10.6% - down from 11.5% in the year-earlier quarter - turned out better than expected, he said. Analysts had expected margins of 8%.

Still, the problems associated with COVID-19, with industrial shutdowns affecting demand, would remain, said Rosengren, who joined ABB in March from Sandvik . (ST:SAND)

"A lot of uncertainty remains and we still see some challenging quarters ahead," he said as ABB launched its previously announced share buyback programme.

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