ABB Reports Q2 Below Street View, Exits Russian Market, Plans Turbocharging Spin-Off

ABB Ltd ABB reported a second-quarter FY22 revenue decline of 2.7% year-over-year to $7.25 billion, up 6% on a comparable basis, missing the consensus of $7.47 billion.
EPS improved was $0.20 (-47% Y/Y), below the consensus of $0.31.
Orders increased by 10% Y/Y to $8.81 billion and grew 20% on a comparable basis.
Electrification revenue $3.53 billion (+4% Y/Y), Orders $4.04 billion (+9% Y/Y) and Backlog $6.71 billion (+33% Y/Y).
Motion revenue $1.63 billion (-12% Y/Y), Orders $2.08 billion (+7% Y/Y) and Backlog $4.57 billion (+28% Y/Y).
Process Automation revenue $1.53 billion (-1% Y/Y), Orders $1.82 billion (+17% Y/Y) and Backlog $6.17 billion (+3% Y/Y).
Robotics & Discrete Automation revenue $732 million (-12% Y/Y), Orders $1.11 billion (+15% Y/Y) and Backlog $2.73 billion (+82% Y/Y).
Gross profit margin contracted by 210 bps to 31.6%. Operating income totaled $587 million (-46.3% Y/Y), and the margin was 8.1% for the quarter, down by 660 bps.
Operational EBITA was up 2% Y/Y to $1.14 billion, and the margin expanded by 50 bps to 15.5%.
ABB's cash used in operating activities in continuing operations year-to-date was $179 million, compared to cash generated of $1.19 billion a year ago.
The company stated that on the back of the volatile financial markets, it has decided to postpone the planned IPO of the E-mobility business.
ABB plans to spin off Accelleron and list it on the SIX Swiss Exchange in October, subject to shareholders' approval. ABB shareholders would receive 1 Accelleron share for every 20 ABB shares held.
ABB has decided to exit the Russian market. The financial impact amounted to $57 million in Q2, of which $23 million will impact cash flow in Q3.
3Q Outlook: ABB anticipates double-digit comparable revenue growth and the Operational EBITA margin to improve sequentially.
In FY22, the company expects a steady margin improvement towards the 2023 target of at least 15%.
Price Action: ABB shares traded higher by 1.60% at $28.53 on the last check Thursday.

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ABB Reports Q2 Below Street View, Exits Russian Market, Plans Turbocharging Spin-Off

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