Some bad news, some good news, some neutral news, but overall, the economic picture seems to be improving. Here's the release, full-text:
ABB Q1 results --Short cycle orders improve, infrastructure business more challenging
Orders down 19% , but base orders indicate negative trends are reversing
Revenues 11 percent lower, reflecting 2009 order declines
EBIT at $709 million, down approximately $150 million
Cash from operations improved by more than $500 million
Zurich, Switzerland, April 22, 2010 – ABB’s orders declined 19 percent in the first quarter of 2010 as a result of lower large orders (above $15 million) compared to a record intake last year, and overall weakness in the power infrastructure business.
Orders in most of ABB’s short-cycle businesses, however, were steady or higher on growing industrial demand. Base orders (below $15 million) showed the strongest increase since the beginning of the global economic crisis in the summer of 2008.
Revenues were 11 percent lower than the year-earlier period, mainly due to order declines in 2009 flowing through to sales in the first quarter.
Earnings before interest and taxes (EBIT) amounted to $709 million, resulting in an EBIT margin of 10.2 percent. The EBIT margin, excluding mainly gains and losses on derivative transactions as well as restructuring-related costs, was 11.5 percent.2 Savings in the first quarter from the company’s $3-billion cost take-out program were in excess of $300 million.
Cash inflow from operations was $427 million compared to cash used in the same quarter a year earlier of $104 million. The improvement was due primarily to continued net working capital management efforts. Net income amounted to $464 million in the quarter.
"We had a challenging first quarter on the power side while seeing some encouraging signs of growth in our short-cycle businesses, mainly in the automation markets," said Joe Hogan, ABB's CEO. "Thanks to the progress we’ve made on our cost-out program, however, our profitability remains within the target range.
"Given the improving global economy, we’re cautiously optimistic that the momentum should continue to build for our short cycle businesses, especially in the emerging markets, driven by increasing industrial production. We expect to see a similar trend in our larger late-cycle business, however, only later in the year," Hogan said.