ABB Ltd. is on the driver’s seat. Company is growing at a very past pace. ABB Ltd. reported EBIT of almost $800 million in the fourth quarter, despite approximately $350 million in restructuring-related charges. This is the second-highest revenue quarter in the company’s history. The company saved $500 million during the fourth quarter by cost-cutting efforts. ABB Ltd. is also targeting $3 billion in cost savings.
Net income was $540 million in the fourth quarter. Cash flow from operations also reached a record $1.8 billion. ABB’s profitability was well within its EBIT margins target range of 11-16 percent, backed by cost-cutting efforts and strong operational controls. The company holds hefty cash balances, which would keep liquidity issues at bay. The debt levels of the company are also low.
Revenue visibility looks strong with as the company is striking new deals and continues to invest in overseas expansion. New technology solution rollouts are strengthening its value proposition to customers.
ABB’s year-on-year order declines slowed in the latest quarter and base orders were slightly higher than the previous quarter. In other words, ABB’s fourth-quarter orders stabilized versus the third quarter of 2009. ABB Ltd. is now in a stronger position compared to last year.
The company seems to be well positioned for economic upturn. The drivers of ABB’s businesses, fueled mainly by the need to build and upgrade energy infrastructure, address climate change and the increasing importance of emerging markets in the global economy, continue to offer attractive growth opportunities.