ABB ABB Ltd

Adds share reaction, analyst comments, margin info

 
   By Nathan Allen 
 

Shares in ABB Ltd. (ABBN.EB) are trading lower Thursday morning after the Swiss industrial conglomerate posted weaker-than-expected third-quarter orders, sales and operating margins.

Net profit for the quarter was $603 million, up from $571 million a year earlier, while revenue climbed 6% to $9.26 billion from $8.72 billion, the company said.

However, total orders of $8.94 billion are 3% below consensus and the group's operating margin of 12.1% is 30 basis points below analyst estimates, according to Baader Bank.

ABB toned down the wording in its outlook, noting macroeconomic signs in Europe remain "robust" compared with an earlier description of the region's economy "trending positively."

At 0746 GMT ABB was trading 3.9% lower at 19.48 Swiss francs ($19.54).

ABB's total order backlog stands at $23.5 billion, which won't be sufficient to meet consensus revenue estimates of $39.2 billion, according to Morgan Stanley's Ben Uglow.

"The implied conversion rate is c.170%, which is unprecedented," he said.

Current projections suggest there is a 5% downside to ABB's 2019 forecast for earnings before interest, taxes and amortization--the group's preferred profitability metric--Mr. Uglow said.

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

(END) Dow Jones Newswires

October 25, 2018 04:10 ET (08:10 GMT)

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