ABB Q4 Profit Rises, But Orders Down; Sees Margin Growth; Stock Up

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Shares of ABB Ltd.(ANN.L,ABB) were gaining around 3 percent in the morning trading in Switzerland after the engineering company reported Wednesday higher profit in its fourth quarter, despite weak revenues and orders. Going ahead, the company expects to improve operating margins.

The company projects weaker growth in Europe and the US, while China's stabilizing trend might be impacted by the coronavirus outbreak.

Further, ABB said the divestment of Power Grids business, which was announced in December last year, is on track. The company is also seeing positive effects of implementing new operating model.

For the fourth quarter, net income attributable to the company grew 3 percent to $325 million from last year's $317 million. Basic earnings per share were $0.15, same as last year.

Operational earnings per share were $0.27, compared to $0.30 a year ago.

The net results included Power Grids business as discontinued operations. On a continuing operations basis, income was $307 million, up 46 percent from last year's $210 million.

Income from operations for the quarter surged 136 percent from last year to $648 million. Operational EBITA grew 22 percent from last year to $710 million. Operational EBITA margin was 10.1 percent, up 2.2 percentage points from last year's 7.9 percent.

Revenues, meanwhile, dropped 4 percent to $7.07 billion from prior year's $7.40 billion. The results mainly reflected slowing short-cycle industrial demand, mainly in the US. On a comparable basis, revenues dropped 2 percent.

Orders also declined 1 percent to $6.89 billion from $6.99 billion last year. Comparable orders grew 1 percent.

Robotics & Discrete Automation reported weak revenues and orders.

Further, ABB said its board has proposed an ordinary dividend of 0.80 Swiss francs per share for 2019.

In Switzerland, ABB shares were trading at 24.03 Swiss francs, up 3.09 percent.

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