Shares of ABB Ltd. were gaining more than 5 percent in Switzerland trading as well as in pre-market activity on the NYSE after the engineering company reported Thursday higher first-quarter profit.
Looking ahead for the second quarter, ABB anticipates that revenues tend to be sequentially stronger in absolute terms, supporting a slight sequential margin increase, assuming no escalation of lock-downs in China. For fiscal 2022, the company expects a steady margin improvement towards the 2023 target of at least 15 percent, supported by increased efficiency.
Björn Rosengren, CEO, said, “ABB has started the year with a promising performance in the face of multiple external uncertainties. I expect this year to result in improving profitability, solid cash flow and execution of our planned portfolio activities.”
The company also announced a continuation of share buybacks of up to $3 billion, including the fulfillment of the promise to return the remaining $1.2 billion of proceeds related to the divestment of Power Grids. The new buyback program was launched on April 1.
In addition, ABB said it plans for an exit of the Turbocharging business, although the geopolitical uncertainties caused it to delay the final decision on a spin-off or sale to the second quarter.
For the first quarter, net income attributable grew 20 percent to $604 million from last year’s $502 million.
Basic earnings per share were $0.31, up 25 percent from $0.25 last year. Income from continuing operations increased 17 percent to $643 million.
Operational EBITA grew 4 percent from last year to $997 million, operational EBITA margin increased to 14.3 percent from 13.8 percent a year ago. The results benefited from higher volumes and successful pricing activities, partly offset by adverse impacts from cost inflation.
Revenues edged up 1 percent to $6.97 billion from last year’s $6.90 billion. Comparable revenue growth was 7 percent. Revenues were driven by positive development in all business areas except for Robotics & Discrete Automation, which was hampered by component shortages.
Orders were $9.37 billion, up 21 percent on a reported basis and up 28 percent at comparable basis. The order backlog increased to $18.9 billion at the end of the period, up 28 percent year-on-year.
In Switzerland, ABB shares were trading at 31.74 francs, up 5.55 percent.
In pre-market activity on the NYSE, ABB shares were gaining 5.2 percent to trade at $33.44.
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