Tags: ABB | Swiss | power | player

ABB a Growing Swiss Power Player

By    |   Tuesday, 29 Nov 2011 12:21 PM

ABB (ABB), based in Switzerland, is a global player in power and automation technologies. It operates in more than 100 countries, mostly in Europe and Asia. But worry over a macro-economic slowdown has socked ABB’s stock price, down 17 percent so this year.

Yet ABB has lots going for it. The forward-thinking company is banking on two growth areas: building power infrastructures in emerging countries and supplying technologies for the smart grid. “The world needs more from its power and industrial resources while reducing environmental impacts,” says ABB CEO Joe Hogan, formerly the CEO of GE’s health care business. “ABB is in a great position.”

Hogan has set ambitious revenue growth targets for ABB: a compound annual growth rate of 7 percent to 10 percent from 2011 to 2015. Snapping up acquisitions worldwide will also feed revenues. Recently, ABB bought companies in Sweden, Australia and Switzerland.

So far, ABB is on target. Third-quarter revenues grew 11 percent to $9.3 billion, versus $7.9 billion a year ago. Orders rose 12 percent. But net income was flat.

ABB’s balance sheet is rock solid, though, with $1 billion in cash on hand. And ABB aims to squeeze $1 billion from costs this year. The goal is creating “solid shareholder value over the long-term,” adds Hogan.

Analysts like ABB

Of the eight analysts followed by Thomson/First Call, five have strong buy recommendations and two have buys, with one hold.

S&P analysts fall in the hold camp, citing global economic uncertainty and ABB’s cyclical businesses.

The company next reports Feb. 16.

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ABB (ABB), based in Switzerland, is a global player in power and automation technologies. It operates in more than 100 countries, mostly in Europe and Asia. But worry over a macro-economic slowdown has socked ABB s stock price, down 17 percent so this year. Yet ABB has...
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2011-21-29
Tuesday, 29 Nov 2011 12:21 PM
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