ABB’s fourth-quarter earnings impacted by Power Systems division, mainly from storm-related delays in offshore wind projects and some operational issues in Power Systems (PS) division.
The company expects EPS to fall to $0.23 from $0.26 a year earlier and vs consensus of $0.40. Shares are -3.3% in Stockholm.
BLOOMBERG:?Today?s announcement is ?bad news and means downside to full year 2013 estimates,? said Bank Vontobel analyst Panagiotis Spiliopoulos. Net income would have been in line without the additional expenses, he said in a note.
Additional expenses will be booked for restructuring, with net income predicted to be $525 million in the fourth quarter, Chief Financial Officer Eric Elzvik said on a call.
Analysts had been predicting about $923 million, according to an average of estimates collected by Bloomberg. Shares of the Zurich-based company fell 2.7 percent to 23.53 Swiss francs as of 9:04 a.m. local time.
ABB is feeling the brunt of winter storms in the North Sea last month, which delayed offshore wind projects, causing knock-on costs elsewhere. The task of getting the profitability of power systems back on track falls to Claudio Facchin, who was announced as a successor to Brice Koch in November.
?While the performance of four divisions was in line with our expectations during the fourth quarter, the issues we face in Power Systems are disappointing,? said Ulrich Spiesshofer, Chief Executive Officer of ABB.
?This means we will not be able to deliver our profitability target for the division in the quarter. A focused action program is addressing these issues and implementation has been started swiftly.
?With Claudio Facchin, we have a leader at the helm of PS who brings global systems experience to drive the business towards an improved performance.
?The division?s new leadership is assessing the progress and targets of the realignment and we expect to provide an update when we announce the fourth-quarter and full-year results,? Spiesshofer added.