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ABB Reduces 2021 Guidance as Revenues Hit by Supply Chain Constrictions-Updated

By Ed Frankl

ABB Ltd. said it has cut its full-year growth guidance due to tight supply chains despite increased orders, the company announced its third-quarter results.

Swiss engineering firm expects comparable revenue growth of 6% -8% in 2021 from the previous 10% “just below” as logistics issues continue to affect customer delivery on Thursday He said he was out.

According to ABB, the Zurich-based company’s revenues increased 7% in the three months to the end of September, rising from $ 6.58 billion in the year-ago quarter to $ 7.03 billion.

Sales were hampered primarily by semiconductor shortages, tight job markets, pandemic restrictions, and supply chain constraints related to imbalances throughout the supply chain, he said. According to the company, similar sales increased by 4%.

According to ABB, orders increased 29% to $ 7.87 billion, achieving double-digit growth in all business areas.

ABB said it has increased interest, taxes, and operating profit before amortization from $ 787 million in the previous year to $ 1.06 billion due to increased profits in the process automation segment. That margin increased from 12% in the third quarter of 2020 to 15.1%.

ABB has reviewed margin guidance and expects 4Q operational Evita margins to decline slightly quarterly in line with historical patterns.

Bjorn Rosengren, CEO, said, “Third quarters include high levels of demand that drive strong order growth, while a tight supply chain impacts our bottom line more than we expected. I drew a complicated situation. “

The company said it expects continued strong improvements towards the Ebita margin target in the upper half of the 13% to 16% range from 2020 to 2023.

ABB’s net income fell from $ 4.53 billion in the same period in 2020 to $ 652 million in the quarter. Last year’s figures included book profits related to the sale of the power grid unit to Hitachi.

The US order growth rate was 31%, ahead of China, up 16%, but China has boosted orders in the automotive sector, the company said.

According to ABB, cash flow from operating activities surged from $ 408 million in the year-ago quarter to $ 1.10 billion.

“Our cash generation is very strong, leaving plenty of room on our balance sheet to support both organic growth and acquisitions and reward our shareholders,” Rosengren added.

Write to Ed Frankl at edward.frankl@dowjones.com

ABB Reduces 2021 Guidance as Revenues Hit by Supply Chain Constrictions-Updated

Source link ABB Reduces 2021 Guidance as Revenues Hit by Supply Chain Constrictions-Updated

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