ABB Reports Q2 Net Income Up 34% on Strong Top-Line Growth
ABB (Zurich, Switzerland) reported record orders, revenues and earnings before interest and taxes (EBIT) in the second quarter of 2008, with net income reaching $975 million. Global demand for ABB?s core technologies to provide reliable electrical power and improved industrial efficiency remained robust, while ongoing operational improvements contributed to increased profitability.
EBIT reached $1.4 billion, up 42 percent from a year earlier. The EBIT margin increased to 16.1 percent from 14.4 percent in the second quarter of 2007 as ABB continued to benefit from high capacity utilization, greater sourcing of components from emerging economies and other operational improvements.
Orders increased in all divisions in a strong market and were up 31 percent (local currencies: 19 percent) to a single-quarter record of $11.3 billion. It was also the first quarter in which orders from emerging markets exceeded orders from the mature economies, accounting for 51 percent of total orders received.
Revenues increased by 27 percent (local currencies: 15 percent) to $9 billion. Utilities continued to invest in new and refurbished power infrastructure while industrial customers, especially in the oil and gas, marine and minerals sectors, further expanded capacity. The need for more energy efficient industrial technologies to meet the challenges of rising energy and raw materials costs also continued to drive growth.
"This was a record quarter for ABB,? said Michel Demaré, ABB's Chief Executive Officer and Chief Financial Officer. ?Global demand for our market-leading technologies in power infrastructure, energy efficiency and industrial productivity remained at high levels. Our strong market positions in both the emerging and mature economies continue to provide us with excellent organic growth opportunities. At the same time, we continue to improve our profitability and total return on capital through measures such as better project execution and risk management, lower cost sourcing, and footprint optimization.?
