By Ed Frankl
ABB Ltd. said Thursday that second-quarter profit and revenue missed expectations despite higher volumes and orders, as it flagged strained supply chains and logistics issues in China as well as exchange-rate impacts.
The Swiss industrial company reported net income of $379 million in the three months to the end of June, down from $752 million in the same period the year before.
Orders climbed 10% from 2Q 2021 to $8.81 billion, though revenue dropped 3% to $7.25 billion, both on a reported basis.
This compared with expectations of $467 million for net profit and $7.44 billion for revenue, according to analysts’ consensus provided by the company.
ABB’s closely watched operational earnings before interest, taxes, and amortization rose slightly to $1.14 billion from $1.11 billion the previous year.
“Negative impact from changes in exchange rates and portfolio changes outweighed the positives of strong price execution and increased volumes, with the latter somewhat held back by the strained supply chain,” ABB’s Chief Executive Bjorn Rosengren said.
The Zurich-based company said there was pressure on customer deliveries in China, where lockdowns slowed down logistics more than expected.
ABB said its exit from Russia triggered a charge of $57 million, of which $23 million will hit cash flow in the third quarter.
The company added that in 3Q it expects double-digit comparable revenue growth and the operational Ebita margin to sequentially improve.
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