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ABB says U.S. and China markets weakening as profit dips 15%

ABB says U.S. and China markets weakening as profit dips 15%
FILE PHOTO: The logo of Swiss power technology and automation group ABB is seen at the Swiss Economic Forum (SEF) conference in Interlaken, Switzerland May 24, 2019. REUTERS/Arnd Wiegmann/File Photo -
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Arnd Wiegmann(Reuters)
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By John Revill

ZURICH (Reuters) – ABB <ABBN.S> said conditions were weakening in the United States and China as the Swiss engineering company on Wednesday reported a 15% drop in third-quarter profit.

Order intake turned negative in the United States, ABB said, while the downturn in China accelerated during the period as Beijing felt the impact of its trade dispute with Washington.

The factory robot to industrial drives maker’s net profit fell to $515 million from $603 million a year earlier. The figure beat the $363 million expected by analysts in a company-gathered consensus.

Profit fell as the company reduced by $80 million the value of large projects in the Power Grids business it is selling to Japan’s Hitachi <6501.T>. ABB’s revenue fell 3% to $6.9 billion from $7.1 billion, the company said, slightly missing the $6.94 billion expected by analysts.

The company’s results were also hit as ABB trimmed the value of a project to build a power plant in South Africa, taking a bite out of orders, revenues and earnings at its industrial automation division.

Chief Executive Peter Voser described the results as “robust” as the company faced “weaker macroeconomic conditions impacting some of our customer markets, above all robotics and automation.”

ABB, whose products are used in factories, electrification projects and transport schemes, said macro economic conditions remained mixed in Europe and China, while the conditions had weakened in the United States.

Its robotics business continued to struggle with orders down 16% as customers in the automotive industry held off buying new machinery. Total U.S. orders fell 1%, while orders for China fell 7%.

During the third quarter China’s economic growth slowed as the trade war with the U.S. hit factory production in the world’s second biggest economy.

(Reporting by John Revill)

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