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ABB net income up 87% on energy efficiency and infrastructure demand
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- Orders and revenues grow at a double-digit pace
- EBIT hits record $1.4 billion, EBIT margin at 17.0 percent
- Net income reaches $1 billion in the quarter, EPS up 76%
ABB’s first-quarter net income reached $1 billion, an increase of 87 percent compared to the same quarter in 2007, as global demand for more reliable power and improved industrial efficiency continued to grow and the company’s efforts to improve operational performance generated further benefits.
Earnings before interest and taxes (EBIT) reached a record $1.4 billion, up 65 percent from a year earlier. The EBIT margin increased to 17.0 percent from 13.2 percent in the first quarter of 2007. Approximately one percentage point of the EBIT margin in the first quarter resulted from gains on the mark-to-market treatment of hedging transactions. The gains were related mainly to the sharp decline in the value of the U.S. dollar and increases in commodity prices during the quarter.
Orders, revenues and EBIT increased in all divisions as market demand remained robust in all regions. Utilities continued to invest in new and refurbished power infrastructure while industrial customers, especially in the metals, minerals and marine sectors, further expanded capacity on the back of high commodity prices. Industrial demand for more energy efficient technologies also continued to be a key growth driver.
“ABB experienced a very good start in 2008 across all businesses and regions,” said Michel DemarǸ, ABB’s Chief Executive Officer and Chief Financial Officer. “Demand from utilities and most of our major industrial markets remained strong around the world, especially in emerging economies, but also in the U.S. Customers continued to invest in areas where we are market and technology leaders – power infrastructure, energy efficiency and productivity.
“These excellent results also reflect our continuing strong operational performance,” DemarǸ added. “Lower cost sourcing, footprint optimization, better project execution and risk management, and more efficient capacity utilization all contributed to our improved results.”
