ABB Rises as CEO Steps Down, 1Q Earnings Beat Consensus -- Update

Date : 04/17/2019 @ 9:34AM
Source : Dow Jones News

ABB Rises as CEO Steps Down, 1Q Earnings Beat Consensus -- Update

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--Shares in ABB up more than 5%

--Chairman Peter Voser to become interim CEO after Ulrich Spiesshofer resigns

--First-quarter earnings ahead of expectations

 

By Nathan Allen

 

Shares in ABB Ltd. (ABBN.EB) rose Wednesday morning after the Swiss engineering company posted better-than-expected first-quarter earnings and said Chief Executive Ulrich Spiesshofer has stepped down.

ABB's net profit for the January-March period dropped 6% to $535 million but easily outstripped a FactSet-compiled consensus of $431.5 million. Orders edged up 1% to $7.61 billion, while revenue climbed 6% to $6.85 billion.

However, the main focus is on the surprise resignation of Ulrich Spiesshofer, a 14-year veteran of the company with more than five years in the top job.

At 0802 GMT ABB was trading 5.6% higher at 21.24 Swiss francs ($21.12).

While Mr. Spiesshofer had some success in pruning the group's portfolio and overseeing a $6.4 billion sale of its power-grids unit, he came under fire from shareholders--notably activist investor Cevian Capital--for failing to deliver a more radical restructuring.

Under his leadership, the company's share price remained subdued, falling around 0.8% since he started, compared with gains of 21% at rival Siemens AG (SIE.XE) and 18% at Schneider Electric SE (SU.FR) over the same period.

Chairman Peter Voser, a former CEO of Royal Dutch Shell PLC (RDSB.LN), will become ABB's interim CEO until a replacement for Mr. Spiesshofer has been found.

Citi analyst Martin Wilkie said the leadership shakeup is likely linked to a broader shift in ABB's strategy, rather than any dissatisfaction with earnings, and will be welcomed by investors.

"The company is moving from a phase of strategy definition to execution, and the departure looks linked to the entering of this new phase," he said.

 

Write to Nathan Allen at nathan.allen@dowjones.com

 

(END) Dow Jones Newswires

April 17, 2019 04:19 ET (08:19 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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