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

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

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