ZURICH: ABB Ltd reported a drastic fall in second-quarter profit as the Swiss engineering company was hit by a slowdown in the automotive sector and took a charge for ditching its solar inverters business earlier this month.
In the first set of earnings under a new structure and with interim Chief Executive Officer Peter Voser at the helm, ABB’s net profit plunged 91% to $64 million, from $681 million a year earlier. Analysts had expected a net profit of $2 million, according to a company-gathered consensus.
The quarterly results included a $455 million charge to offload the company’s loss-making solar inverter business to Italy’s FIMER SpA. ABB also cited a slowdown in the automotive sector, a major customer of its industrial robots.
During the quarter ABB’s sales rose 7% to $7.17 billion, missing forecasts of $7.19 billion.
The maker of industrial robots and electrification products is currently in the middle of a major overhaul, selling its power grids business to Japan’s Hitachi Ltd and reorganising its remaining operations into four divisions.
ABB on said on Wednesday it had begun a review of its integrated direct current power business, the latest step in the Swiss engineering company’s overhaul to tackle years of underperformance.
The company would continue to focus on portfolio management, Voser said, in a period of “macro economic headwinds and geopolitical uncertainty.”
“Against a backdrop of more subdued activity in some end-markets ABB expects slight growth in annual revenues on a comparable basis in 2019, supported by its order backlog,” the company said.