ABB 1Q Profit Grew But Cash Flow Slumped by More Than Expected -- Update
By Ed Frankl
ABB Ltd. on Thursday posted higher first-quarter profit and
revenue, lifted by a jump in orders, but said cash outflow was
higher than expected.
The Swiss industrial company said quarterly net income rose to
$604 million from $502 million last year on orders that climbed 28%
on a comparable basis to $9.37 billion.
The company's closely watched operational earnings before
interest, taxes, and amortization rose to $997 million in the first
three months of the year from $959 million in 2021.
Analysts had predicted net profit of $562 million and
operational EBITA of $946 million, according to consensus figures
provided by the company.
However, a drop in cash flow from operating activities to
negative $573 million was sharper than anticipated due to a
higher-than-expected build-up of net working capital to support
deliveries from the order backlog, the company said.
"Cash delivery will clearly be in focus going forward and I
expect a solid full-year cash flow," Chief Executive Bjorn
Cash flow was in positive territory at this point last year, at
But higher volumes and stronger pricing offset hits from cost
inflation related to raw materials, certain components, logistics
and tight labor markets, ABB said.
ABB said the level of component shortages was broadly similar to
the fourth quarter of 2021, except in its robotics & discrete
automation division where customer deliveries were delayed due to
The sharp revenue decline in the division was more than offset
by "strong comparable improvements" in the other business areas, it
The strong order intake was driven by "high general customer
activity" and not by large orders, the Zug-based company said.
Quarterly revenue rose 7% on a comparable basis to $6.97
billion, though that was slightly below consensus of $7.08
The company kept its full-year guidance and confirmed that it
expects to make a decision on a spinoff or sale of its
turbocharging business in the second quarter.
"ABB has started the year with a promising performance in the
face of multiple external uncertainties. I expect this year to
result in improving profitability, solid cash flow and execution of
our planned portfolio activities," Mr. Rosengren said.
Write to Ed Frankl at email@example.com
(END) Dow Jones Newswires
April 21, 2022 02:22 ET (06:22 GMT)
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