ABB says market uncertainty rising as COVID-19 restrictions return

By John Revill

ZURICH (Reuters) – ABB saw improving market conditions during its fourth quarter although uncertainties had also increased with the reintroduction of COVID-19 restrictions towards the end of last year, the engineering company said on Thursday.

Orders and revenues rose during the period, with ABB saying it was seeing positive development in general industry and among machine builders supplying sectors like construction, distribution, consumer electronics, and food and beverage.

But other areas like oil and gas, conventional power generation and marine power remained subdued, ABB said.

“In the fourth quarter, market conditions improved compared to the third quarter,” said Chief Executive Bjorn Rosengren. “That said, some key end-markets remained challenging, input costs rose, and uncertainty due to COVID-19 related restrictions increased as the quarter progressed.”

The Swiss industrial company said fourth-quarter revenues increased 2% to $7.18 billion, beating forecasts for $6.94 billion in a company-gathered consensus of analyst forecasts.

The maker of industrial robots and fast-charging stations for electric vehicles said its operational earnings before interest, tax and amortisation (EBITA) rose to $825 million, beating forecasts for $768 million.

But it reported a net loss of $79 million, missing analyst expectations for a profit of $104 million, as it paid back bonds early. Cash flow was also hit by a $115 million charge to settle an investigation into improper payments surrounding a South African power plant.

ABB is a signifier for the health of the broader economy, with companies ordering more drives and controllers when they want to ramp up production.

Its caution contrasted with the optimism at German rival Siemens, which on Wednesday raised its 2021 guidance, citing a quicker-than forecast-rebound in the automotive and machine-building sectors.

(Reporting by John Revill; Editing by Michael Shields)