Power and automation technology company
ABB reports that net income declined by 21 percent to $906 million in the first half of 2016, down from $1,152 million during the corresponding period in 2015.
Second-quarter net income fell by $182 million, or 31 percent, to $406 million. The figure was impacted by $367 million of restructuring-related expenses, ABB said. Net income excluding certain amounts and non-operational items, also known as operational net income, grew by 12 percent.
Revenues during the first six months of the year decreased by 6 percent to $16,580 million, whilst orders were 9 percent lower at $17,569 million.
During the second quarter, revenues dropped 5 percent to $8,677 million and orders were down 8 percent to $8,316 million.
Cash flow from operating activities was up 80 percent, or $484 million, to $1,082 million, primarily due to strong working capital management and lower income tax payments, ABB said.
Commenting on the results, CEO
Ulrich Spiesshofer remarked: "We improved our operational margin for the seventh consecutive quarter and significantly increased cash flow through relentless execution amid continued strong market headwinds and economic uncertainties.
"We delivered double digit operational earnings per share growth for the quarter and year-to-date, as cost savings contributed to the bottom line.
"Our continued focus on high growth segments dampened the impact of challenging markets like the process industries. We are improving our cost and capital structure, as well as our productivity, and shaping a leaner, more agile ABB in a disciplined way. We have strengthened our leadership team and are executing our Next Level strategy, focused on accelerating sustainable value creation."
Outlook
In its outlook, ABB said: "Macroeconomic and geopolitical developments are signalling a mixed picture with continued uncertainty. Some macroeconomic signs in the US remain positive and growth in China is expected to continue, although at a slower pace than in 2015. The market remains impacted by modest growth and increased uncertainties relating to Brexit in Europe, and geopolitical tensions in various parts of the world. Oil prices and foreign exchange translation effects are expected to continue to influence the company's results.
"The long-term demand outlook in ABB's three major customer sectors - utilities, industry and transport & infrastructure - remains positive. Key drivers are the big shift in the electricity value chain, industrial productivity improvements through the Internet of Things, Services and People (IoTSP), as well as rapid urbanization and the need for energy efficiency in transport & infrastructure.
"ABB is well positioned to tap these opportunities for long-term profitable growth with its strong market presence, broad geographic and business scope, technology leadership and financial strength."
