Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Euronext Paris  >  Schneider Electric    SU   FR0000121972

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets 

ABB Gains From North American Growth As Profit Rises

share with twitter share with LinkedIn share with facebook
share via e-mail
0
04/25/2012 | 10:56am CEST

-- Company says first quarter growth led by North America

-- Order growth weakest in China and southern Europe

-- Company says cost savings enough to compensate for pricing pressure

-- More than half of the decline in profitability due to lower demand in China

(rewrites, adding detail throughout)

 
   By John Revill 
   Of  
 

Power and technology company ABB Ltd. (ABBN.VX) Wednesday beat expectations with a slight rise in first quarter profit and said it would work on improving its margins which declined from a year earlier due to lower demand in China.

Like other power companies such as French rival Schneider Electric SA (>> SCHNEIDER ELECTRIC), ABB has been battling with slowing demand in Europe and China as the economies cool and prices fall for its products which range from power cables and transformers to robotics and industrial control systems,

A strong performance in North America helped ABB partially overcome the downturn, while it also pushed through cost cuts to combat weaker pricing during the three months to the end of March.

ABB said it is looking to profitable growth in 2012 and also improve operating margin, which fell to 11.8% from 12.1% a year earlier as the Zurich-company worked through a backlog of less profitable contracts.

"We saw improved profitability in several businesses compared with the end of last year, and we intend to build on that momentum to tap the many opportunities we see for profitable growth over the rest of the year," said Chief Executive Joe Hogan.

ABB said it expects its early cycle business, like automation and low voltage products, to remain steady or grow at a low single-digit rate.

The margin on operational earnings before interest, taxes, depreciation and amortization, the company's preferred measure which cuts out the impact of derivative gains and losses, fell to 13.9% from 15.7%.

More than half of the group's profitability decline was attributable to lower demand in China, especially in the construction and transportation sectors, ABB said.

"As we guided after the fourth quarter, there was continued price pressure on revenues coming out of the order backlog and mixed effects that impacted profitability, but we could mitigate most of that through cost savings," Hogan added.

Cost savings of $262 million, mainly though sourcing and productivity improvements, overcame lower prices of $250 million during the period.

U.S. orders increased by 27% but Hogan highlighted some weakness in China, where orders declined by 35%.

"We had considerable strength in the United States, that recovery continues, stronger than we anticipated," Hogan said. "Northern Europe continues to be good for us. Mediterranean areas are difficult and China saw some difficulties."

Net profit in the three months to March 31 rose 4.6% to $685 million, beating expectations of $674 million.

Sales rose 6% to $8.91 billion, beating forecasts of $8.84 billion, but orders were flat at $10.37 billion.

Analysts said the results were broadly in line with expectations, while the slower China situation should improve over the year.

"China is important for ABB, but other companies are more affected by the slowdown there. The improvement in the Americas can definitely make up for China," said Christoph Ladner, an analyst at Kepler Capital Markets.

At 0808 GMT, ABB shares were down 2.6% at 17.90 Swiss francs, valuing the company at CHF41.43 billion.

-By John Revill, Dow Jones Newswires; +41 43 443 8042 ; [email protected]

Stocks mentioned in the article : SCHNEIDER ELECTRIC
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on SCHNEIDER ELECTRIC
05/29 SCHNEIDER ELECTRIC : signs agreement with the SalesianCongregation to train unde..
05/28 NEW LAUNCHES : Hotels and Restaurants
05/28 SCHNEIDER ELECTRIC : exec outlines the future of smart cities in the Gulf
05/28 SCHNEIDER ELECTRIC : exec outlines the future of smart cities in the Gulf
05/28 SCHNEIDER ELECTRIC : exec outlines the future of smart cities in the Gulf
05/27 SCHNEIDER ELECTRIC : U.S. Patents Awarded to Inventors in Tennessee (May 27)
05/25 SCHNEIDER ELECTRIC : Patent Issued for Isolated and Self-Calibrating Voltage Mea..
05/25 SCHNEIDER ELECTRIC : Patent Issued for Dynamic Digital Input Filtering (USPTO 96..
05/25 SCHNEIDER ELECTRIC : Rail supporters tout economic benefits to region
05/24 SCHNEIDER ELECTRIC : releases system architecture for the mining sector
More news
Sector news : Electrical Components & Equipment - NEC
05/26DJS F : UPS, China's S.F. Express Join Forces to Offer Special Delivery Business
05/15 Desperately short of labor, mid-sized Japanese firms plan to buy robots
05/09 PENTAIR : to spin off its electrical business
04/27 JOHNSON CONTROLS : narrows full-year profit outlook
04/26DJTE CONNECTIVITY : Files 8K - Regulation FD
More sector news : Electrical Components & Equipment - NEC
News from SeekingAlpha
05/03 Rockwell Back To Work
04/10 FOCUS ON EUROPE : Will An Akorn - Fresenius Deal Pass Anti-Trust Scrutiny?
04/03 Schneider Electric sells DTN data software unit in $900M deal
03/29 2017 IPO PROSPECTS : Zuora Thinks It Will Be A Good Time For An IPO
03/08 Schneider Electric Looking To Earn Back Some Investor Love
Advertisement
Financials (€)
Sales 2017 25 241 M
EBIT 2017 3 370 M
Net income 2017 2 071 M
Debt 2017 3 903 M
Yield 2017 3,12%
P/E ratio 2017 18,59
P/E ratio 2018 16,73
EV / Sales 2017 1,77x
EV / Sales 2018 1,70x
Capitalization 40 740 M
More Financials
Chart SCHNEIDER ELECTRIC
Duration : Period :
Schneider Electric Technical Analysis Chart | SU | FR0000121972 | 4-Traders
Full-screen chart
Technical analysis trends SCHNEIDER ELECTRIC
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 24
Average target price 69,7 €
Spread / Average Target 1,3%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Jean-Pascal Tricoire Chairman & Chief Executive Officer
Luc Remont Executive Vice President-France Operations
Emmanuel Babeau Deputy Chief Executive Officer-Finance & Legal
Prith Banerjee Executive Vice President-Technology
Cathy Kopp Independent Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
SCHNEIDER ELECTRIC4.14%45 608
KEYENCE CORPORATION22.06%53 108
EMERSON ELECTRIC CO.5.69%37 973
EATON CORPORATION PLC15.61%34 693
NIDEC CORPORATION7.00%29 267
DAIKIN INDUSTRIES, LTD..1.72%28 747
More Results