ABB Reports Lower Profit, Wary on Energy-Sector, China Outlook - Update

By John Letzing 

ZURICH--ABB Ltd. reported an 11% decline in first-quarter net profit and warned of a challenging mix of declining energy prices and slower economic growth in China.

The Zurich-based power-grid and automated-equipment maker said on Wednesday that net profit fell to $500 million in the three months to end-March from $564 million in the same period last year. Revenue fell 8% to $7.9 billion, the company said.

Analysts had expected net profit of $437 million, and $8.05 billion in revenue.

ABB said a stronger U.S. dollar helped to cut into its reported revenue figure in the period by about 5%.

Recent struggles for the oil and gas industry, in addition to weaker demand in developing economies such as China--a key market for ABB--have hindered the performance of a number of international industrial equipment makers such as General Electric Co. and Siemens in addition to ABB.

ABB said first-quarter orders declined 11%, to roughly $9.3 billion. The company said it had a difficult comparison to the "significant large orders" booked in the same period last year.

Looking ahead, ABB cited "a mixed picture with continued uncertainty."

The company said it expects further growth in the Chinese economy this year, albeit at a slower pace than last year. Growth remains "modest" in Europe, ABB said, which has combined with geopolitical tensions in other parts of the world to create difficult conditions.

ABB Chief Executive Ulrich Spiesshofer said in a statement that the company's strategic portfolio review of its power grids division continues, and that ABB plans to disclose related details in October.

Write to John Letzing at [e-mail]

(END) Dow Jones Newswires

April 20, 2016 02:04 ET (06:04 GMT)

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