By Ed Frankl
ABB Ltd. on Thursday posted higher first-quarter profit and revenue, supported by an increase in orders, but said cash outflows were higher than expected.
The Swiss industrial company said quarterly net profit rose to $604 million from $502 million last year on orders that climbed 28% on a like-for-like basis to $9.37 billion.
The company’s closely watched operating profit before interest, taxes, depreciation and amortization rose to $997 million in the first three months of the year from $959 million in 2021.
Analysts had predicted net profit of $562 million and operating EBITA of $946 million, according to consensus figures provided by the company.
However, a decline in cash flow from operating activities to -$573 million was stronger than expected due to a higher than expected build-up of net working capital to support backlog deliveries, the company said.
“Cash delivery will clearly be a focus going forward and I expect strong cash flow for the full year,” chief executive Bjorn Rosengren said.
Cash flow was in positive territory at this point last year, at $523 million.
But higher volumes and higher prices have offset the effects of cost inflation related to raw materials, some components, logistics and tight labor markets, ABB said.
ABB said the level of component shortages was broadly similar to the fourth quarter of 2021, except in its robotics and discrete automation division where deliveries to customers were delayed due to shortages of semiconductors.
The division’s sharp decline in revenue was more than offset by “comparably strong improvements” in other business areas, he said.
The strong order intake was driven by “high overall customer activity” and not large orders, the Zug-based company said.
Quarterly revenue rose 7% on a like-for-like basis to $6.97 billion, although that was slightly below the consensus of $7.08 billion.
The company maintained its full-year guidance and confirmed that it expects to make a decision on a spin-off or sale of its supercharger business in the second quarter.
“ABB has started the year with a promising performance in the face of multiple external uncertainties. I expect this year to see improved profitability, strong cash flow and the execution of our portfolio businesses. planned,” Mr. Rosengren said.
Write to Ed Frankl at [email protected]
(END) Dow Jones Newswire
April 21, 2022 02:22 ET (06:22 GMT)
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