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


(END) Dow Jones Newswires

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

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

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