ABB Ltd said Thursday that its net profit declined in the final quarter of 2022 as orders fell and customers began normalizing orders.
The Swiss technology group
said it made $1.13 billion in net profit for the fourth quarter compared with $2.64 billion for the prior-year period, which reflected the gains from the sale of its mechanical power transmission division.
The company’s revenue increased 3% to $7.82 billion, ABB said.
Analysts had expected $718 million in net profit and $7.63 billion in revenue, according to a company-compiled consensus of the fourth quarter.
ABB said its quarterly cashflow was weighed down by $315 million due to earlier announced Kusile project settlements.
The company’s orders declined 8% to $7.62 billion.
“Customer activity improved slightly or remained stable in most customer segments, except for declines related to residential construction and discrete manufacturing. The market outlook for discrete manufacturing remains solid, although the fourth quarter was adversely impacted by customers normalizing order patterns following a period of pre-ordering triggered by the long delivery lead times in a strained value chain,” ABB said.
ABB said that after its e-mobility unit raised approximately CHF525 million ($578 million) in pre-IPO private placements, it remained committed to listing the unit.
ABB achieved $1.15 billion in closely-watched quarterly operational earnings before interest, taxes and amortization, a 16% increase over the prior year. It said that prices more than offset the impact of inflation in commodities, freight and labor.
Its full-year operational Ebita margin came in at 15.3%. ABB had targeted a full-year operational Ebita margin of at least 15% by 2023.
ABB said it was proposing an ordinary dividend of CHF0.84 a share, up from CHF0.82 the previous year.
It said that for 2023 it doesn’t anticipate a major setback in demand, although the high inflationary environment adds uncertainty. It said that order growth in the first half of the year should start reflecting the normalization of customer orders.
For 2023 ABB said it is anticipating comparable revenue growth to be above 5% and to again achieve an operational Ebita margin of at least 15%.
The company separately said that its board of directors has nominated Denise Johnson, the group president of Caterpillar Inc., to join as a new member at the company’s upcoming annual general meeting on March 23, replacing Satish Pai who will step down.
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