ABB Emerges Stronger From 2010 As Growth Accelerates On Industrial Demand
ABB reported strong order growth in the fourth quarter of 2010 and higher revenues driven by strong industrial demand for energy efficiency and improved productivity as well as recovering investments into power infrastructure.
The positive trend was reflected in a 17-percent increase in base orders (less than $15 million) – higher in all divisions – as industrial customers expanded capacity and improved efficiency. Orders also increased for power distribution equipment used to deliver reliable power to industrial and commercial customers. Large orders (above $15 million) increased by 21 percent on the award of several large power transmission projects in Europe and the Middle East.
Earnings before interest and taxes (EBIT) rose 23 percent to $978 million. EBIT includes previously-announced provisions of approximately $120 million, mostly related to a large project in the Power Systems division. Restructuring-related costs in the quarter were approximately $120 million.
The operational EBIT margin was 12.3 percent in the quarter despite the project charges and continued price pressure. ABB’s operational EBIT margin for the full-year and fourth-quarter 2010 was well within its target range of 11-16 percent.
The company’s $3-billion cost take-out program was completed on target in the fourth quarter. ABB plans to further reduce costs in 2011 by more than $1 billion.
Net income increased 30 percent to reach $700 million, while cash from operations was near last year’s record. Net cash at the end of the quarter was $6.4 billion. ABB’s Board of Directors has recommended a dividend of 0.60 Swiss francs per share, up from 0.51 Swiss francs last year.
Source: ABB Group