ABB Ltd (ADR) (NYSE:ABB) has reported 1 percent fall in the fourth quarter of FY 17, (3 percent higher in US dollars) in the revenue due to the strong growth in Robotics and Motion, that was offset by the revenue decline in Power Grids. The stock lost over 6.2% on Feb 8th, 2018 (As of 11:39AM EST; Source: Google finance)
But, the Industrial Automation and Electrification Products divisions had steady revenues. Service revenues grew 7 percent higher (11 percent in US dollars) and formed 20 percent of total revenues, compared with 19 percent a year ago. A weaker US dollar compared to the prior year period resulted in a positive translation impact on reported revenues of 3 percent. The changes in the business portfolio is related to the acquisitions of B&R and the divestments made in 2017 had a net negative 1 percent impact on total reported revenues.
Furthermore, in the fourth quarter, the total orders fell 3 percent (2 percent higher in US dollars) as the strong base order development could not offset the impact of lower large orders in Power Grids and Industrial Automation compared with the exceptionally strong prior year period. The total services orders increased 7 percent (11 percent in US dollars), increasing service orders as a percentage of total orders to 21 percent, compared to 20 percent in the same period last year. In addition, the Base orders grew 9 percent (15 percent in US dollars), with the third-party base order growth in all divisions. The large orders forms 7 percent of total orders compared with 17 percent in the prior year period
Moreover, ABB has reported 8 percent fall in the net income in US dollars due to the higher restructuring and restructuring-related expenses, the loss from the divestment of the Oil & Gas EPC business and changes in foreign currency and commodity timing differences. The basic earnings per share fell 7% to $0.18 compared with the fourth quarter of 2016 and operational earnings per share grew 2% to $0.33 in constant currency terms.
On the other hand, the macroeconomic signs are trending positively in Europe and the United States, and the growth expected to continue in China. The overall global market is back to growth though still impacted by uncertainties in various parts of the world. Further, the oil prices and foreign exchange translation effects are expected to continue to impact the company’s results.