ABB ABB Ltd

   By Ed Frankl 
 

ABB Ltd. cut its full-year growth guidance as a tight supply chain bit into its revenue, despite orders climbing, the company said as it unveiled third-quarter results.

The Swiss engineering company said Thursday that it anticipates comparable revenue growth in 2021 of 6%-8%, down from "just below" 10% previously, as logistical issues continued to impact customer deliveries.

Revenue at the Zurich-based company ticked up 7% in the three months to the end of September to $7.03 billion from $6.58 billion in the same period last year, ABB said.

Sales were hampered by supply-chain constraints primarily related to a lack of semiconductors, a tight job market, pandemic restrictions and imbalances in the overall supply chain, it said. Like-for-like sales rose 4%, the company said.

Orders increased 29% to $7.87 billion, with all business areas achieving double-digit growth rates, ABB said.

ABB's closely watched operational earnings before interest, taxes, and amortization rose to $1.06 billion from $787 million a year earlier, driven by increased profit in its process automation segment, it said. Its margin expanded to 15.1% from 12% in the third quarter of 2020.

ABB confirmed its margin guidance, with an operational-Ebita margin in 4Q that is expected to decline slightly quarter-on-quarter, in line with historical patterns.

"The third quarter painted a mixed picture, containing on one hand a high level of demand driving strong order growth, while on the other hand the tight supply chain impacted our revenues more than anticipated," Chief Executive Bjorn Rosengren said.

The company said it continues to expect a strong pace of improvement from 2020 toward the 2023 operational-Ebita margin target of the upper half of the 13%-16% range.

ABB posted net profit that fell to $652 million in the quarter, from $4.53 billion in the same period of 2020. Last year's figure included the book gain related to the divestment of its power-grids unit to Hitachi.

Order growth in the U.S., at 31%, outstripped China, which rose by 16%, although the latter country helped drive orders in its automotive segment, the company said.

Cash flow from operating activities jumped to $1.10 billion from $408 million in the same period last year, ABB said.

"Our cash generation was very strong, leaving ample headroom on our balance sheet to support both organic growth and acquisitions as well as rewarding shareholders," Mr. Rosengren added.

Write to Ed Frankl at edward.frankl@dowjones.com

(END) Dow Jones Newswires

October 21, 2021 02:31 ET (06:31 GMT)

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