By Ed Frankl 
 

ABB Ltd. said Thursday that second-quarter profit and revenue missed expectations despite higher orders and volumes, as it flagged strained supply chains and logistics issues in China as well as exchange-rate impacts and a hit from exiting Russia.

The Swiss industrial company reported net income of $379 million in the three months to the end of June, down from $752 million in the same period the year before.

Orders climbed 10% from 2Q 2021 to $8.81 billion, though revenue dropped 3% to $7.25 billion, both on a reported basis.

It meant ABB missed expectations of $467 million for net profit and $7.44 billion for revenue, according to analysts' consensus provided by the company.

ABB's closely-watched operational earnings before interest, taxes, and amortization rose slightly to $1.14 billion from $1.11 billion the previous year.

"Negative impact from changes in exchange rates and portfolio changes outweighed the positives of strong price execution and increased volumes, with the latter somewhat held back by the strained supply chain," ABB's Chief Executive Bjorn Rosengren said.

On a comparable basis, revenues rose at all its business areas except its robotics segment, where deliveries slowed, hampered by lockdowns in China and semiconductor shortages.

The Zurich-based company said there was pressure on customer deliveries in China, where Covid-19 related lockdowns slowed down logistics more than expected.

The company expects component supply constraints to ease in the coming quarters. In 3Q it expects double-digit comparable revenue growth and the operational Ebita margin to sequentially improve from 15.5% in the second quarter. It kept its full-year guidance.

ABB also said it would exit Russia, triggering a charge of $57 million, of which $23 million will hit cash flow in 3Q.

The company stopped taking new orders in Russia after the invasion of Ukraine. Most of ABB's 750-strong Russian workforce has been on leave since March.

ABB said it is fully committed to proceed with the initial public offering of its E-Mobility business, which it postponed in 2Q due to turbulent markets.

It comes after ABB on Wednesday said it would spin off its turbocharging business Accelleron with a planned listing on Oct. 3.

 

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

 

(END) Dow Jones Newswires

July 21, 2022 02:29 ET (06:29 GMT)

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