轉自：http://www.managingautomation.com/maonline/news/read/ABB_Battered_by_Recession_as_Sales_Profits_Fall_and_Workers_Are_Cut_32925
Abstract: The automation company’s robotics division is hit hard, but leaders are optimistic for long-term growth in renewables and emerging markets.
Keywords: ABB, automation vendor, automation market, manufacturing technology
The recession battered Swiss automation and engineering giant ABB in the second quarter, as revenue fell 12% to $7.9 billion and net profit dropped by 31% to $675 million amid layoffs.
The company also signaled continued bumpiness as new orders for the quarter ended June 30 plunged 35% year over year to $7.3 billion.
“I can’t call the bottom of a market in our business right now,” CEO Joe Hogan said on a conference call with journalists. He said the company’s robotics unit looks particularly vulnerable, as “both the automotive and general industry markets have basically collapsed.” ABB plans to further restructure that division, but is still investing in robotics product development, he said. Robotics is the only division that is not on target to meet its 2011 goals, the company said in a statement.
Company-wide, ABB spent $120 million on an ongoing, $1 billion restructuring program in the second quarter, contributing to the profits decline. Cuts have included plant closures and layoffs in Europe and North America as well as reduced working hours in various locations, Hogan and CFO Michele Demaré told journalists.
“We have [had] a significant amount of job reductions in this business over the last half a year, but we continue to not want to publish that — that’s something internal to ABB,” Hogan said on the call. Both Hogan and Demaré said that cost-reduction efforts have emphasized improvements in sourcing of materials and in general and administrative expenses. ABB is targeting $2 billion in savings from the plan, which started in 2008 and runs through 2010. According to Hogan, it removed $500 million of those costs in the first two quarters this year.
ABB is pinning growth on selling equipment and automation technologies to the power sector, especially as buyers there strive for greener operations. But even that plan looks tenuous in the near term. Although Hogan said that alternative energy sources and the efficient combination of power networks and automation represent a promising future, it’s “not something that will happen overnight.” The timescale, he said, is more like “several decades.”
But Hogan was optimistic that ABB would land a large power contract this quarter and also said that emerging markets hold promise. The company in the second quarter landed notable contracts in India, Brazil, and Mexico, he said. Although orders declined 20% in China, Hogan was optimistic that the country’s stimulus package would generate ABB sales in renewables.
At the end of the quarter, ABB’s net cash stood at $5.7 billion, up from $4.8 billion at the end of the previous quarter. Hogan said the company remains interested in acquisitions.
Meanwhile, ongoing investigations by the U.S. Department of Justice, the European Commission, and various antitrust authorities of suspect payments and alleged anti-competitive behavior continue to cloud the company’s financial outlook. “With respect to these matters, there could be adverse outcomes beyond our provisions,” the company warned.
On a sector basis, revenue and orders dropped across the board: power products revenue by 6% to $2.8 billion and orders by 23% to $2.8 billion; power system revenue by 7% to $1.6 billion and orders by 35% to $1.7 billion; and automation revenue by 20% to $2.2 billion and orders by 28% to $2.1 billion. Process automation revenue fell 9% to $1.9 billion and orders 50% to $1.3 billion; and robotics revenue dropped 44% to $234 million and orders fell 64% to $182 million.
On its balance sheet, ABB reconciles intracompany sales, a calculation that reduced the sum of the divisions’ revenue by $841 million and orders by $818 million.