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ABB shares drop after Q4 revenue growth slowdown

Published Oct 18, 2023 05:10AM ET
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Swiss industrial drives and motors manufacturer ABB reported a slowdown in revenue growth for Q4 and a sustained decline in orders from its second-largest market, China, on Wednesday. The company's shares fell by over 6% following the announcement.

ABB, a prominent player in the Electrical Equipment industry as per InvestingPro Tips, faced competition from Siemens and Schneider Electric (EPA:SCHN). Yet, ABB's Q3 EBITA rose by 13% to $1.392 billion, meeting expectations. The revenues only increased by 8% to $8 billion, slightly below the projected $8.1 billion. The revenue growth for the second quarter of 2023 was 8.47%, as reported by InvestingPro's real-time metrics.

The company experienced a 2% dip in overall order intake, with losses in China and Europe attributed to a softening of the underlying market and high comparables from last year. Double-digit growth in the US and expansions in India and other Asian regions partially offset these losses.

Looking forward, ABB projects low- to mid-single-digit Q4 revenue growth. The company also anticipates an operational margin of 16.5% to 17.0%, up from a previous forecast above 16%. Additionally, ABB expects low double-digit full year 2023 revenue growth.

InvestingPro's real-time metrics show that ABB operates with a market cap of $66.633 billion and a P/E ratio of 18.73. The company has also maintained dividend payments for 18 consecutive years, making it a potentially attractive investment for those seeking regular income, according to InvestingPro Tips.

ABB's financial health is also noteworthy, as its cash flows can sufficiently cover interest payments, another insight provided by InvestingPro Tips. The company's revenue for the last twelve months up to Q2 2023 was $31.25 billion, with a gross profit of $10.77 billion, indicating a strong financial performance.

For more insights like these, visit InvestingPro which features 10 additional tips for ABB and many other companies.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

ABB shares drop after Q4 revenue growth slowdown

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