ABB Stock Slips After Q3 Results, Hints On Supply Chain Constraints

by Akanksha Bakshi, Benzinga Editor
October 21, 2021 12:56 PM | 2 min read |
  • ABB Ltd ABB reported third-quarter revenue growth of 7% year-over-year to $7.03 billion, comparable revenue +4%, missing the consensus of $7.36 billion.
  • Orders increased by 29% Y/Y to $7.87 billion and grew 26% on a comparable basis.
  • ABB noted revenues were hit by supply chain constraints primarily related to semiconductors and imbalances in the overall supply chain, with the impact most tangible in Electrification and Robotics & Discrete Automation.
  • Electrification revenue $3.19 billion (+5% Y/Y), Orders $3.52 billion (+19% Y/Y) and Backlog $5.25 billion (+17% Y/Y).
  • Motion revenue $1.67 billion (+4% Y/Y), Orders $1.91 billion (+24% Y/Y) and Backlog $3.71 billion (+11% Y/Y).
  • Process Automation revenue $1.51 billion (+7% Y/Y). Orders $1.67 billion (+43% Y/Y) and Backlog $6.02 billion (+17% Y/Y).
  • Basic EPS decreased to $0.33 from $2.14 in 3Q20. Gross profit improved by 25% to $2.29 billion and the gross margin expanded by 470 bps to 32.6%.
  • Income from operation totaled $852 million, compared to $71 million a year ago, and the margin was 12.1% for the quarter.
  • Operational EBITA was up 35% Y/Y to $1.06 billion, and margin expanded by 310 bps to 15.1%.
  • The net debt to EBITDA ratio increased year-on-year to 0.5 from -0.4 and declined sequentially from 0.7.
  • ABB's cash and equivalents totaled $4.79 billion as of September 30, 2021. ABB generated cash from operating activities in continuing operations year-to-date of $2.31 billion, compared to $650 million a year ago. 
  • Q4 Outlook: ABB expects a continued tight supply chain to impact customer deliveries. Comparable revenue growth is estimated to be broadly similar to Q3.
  • It expects the Operational EBITA margin to decline sequentially. 
  • FY21 Outlook: ABB expects Comparable revenue growth of 6%-8% (prior view just below 10%) for full-year 2021, hampered by supply constraints.
  • Price Action: ABB shares are trading lower by 6.75% at $32.67 on the last check Thursday.
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