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ABB's Q1 Financial Result Update Shows Y/Y Rise in Revenues

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Zacks Equity Research
·3 min read
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ABB Ltd ABB recently announced preliminary data for the first-quarter 2021 results as well as updated its revenue guidance for 2021. Notably, the company is scheduled to provide its complete first-quarter results on Apr 27, 2021.

Following the preliminary result announcement on Apr 15, shares of the company inched up 4.2% to $32.93.

Results in Detail

Per the preliminary release, for the first quarter, the company is expected to have put up a strong operational performance, supported by strength across its short-cycle business on the back of better-than-expected market development, particularly during March 2021. The company expects quarterly demand to have been augmented by customer stock-building activities.

According to the preliminary report for first-quarter 2021, ABB projects its total orders to be of $7,750 million, higher than $7,346 million in first-quarter 2020. Also, the company predicts first-quarter 2021 total revenues to be $6,900 million, exceeding $6,216 million recorded in the year-ago quarter. The Zacks Consensus Estimate for the same is pegged at $6,626 million. Operational earnings before interest, taxes and amortization (EBITA) in the quarter are expected to be 13.5%, higher than 10.2% recorded in the year-ago quarter.

2021 Guidance

Along with the preliminary announcement, the company provided its 2021 expectations. ABB projects comparable revenues to grow at least by 5%. Notably, it expects recovery in the process industry-related part of its business in the second half 2021.

Zacks Rank, Price Performance and Estimate Trend

ABB, with a $67.1-billion market capitalization, currently carries a Zacks Rank #3 (Hold). The company stands to benefit from its strong market presence, organic growth investments and diligent cost-cutting initiatives over time. However, persistent weakness across automotive and conventional power generation end markets are concerning.

In the past three months, the stock has gained 12.2% compared with the industry’s growth of 2.4%.

In the past 60 days, the Zacks Consensus Estimate for its earnings has been raised 2.4% to $1.26 for 2021, and the same for 2022 has remained stable at $1.48.

Key Picks

Some better-ranked stocks are Griffon Corporation GFF, II-VI Incorporated IIVI and Regal Beloit Corporation RBC, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Griffon delivered a trailing four-quarter earnings surprise of 115.48%, on average.

II-VI pulled off a trailing four-quarter earnings surprise of 83.68%, on average.

Regal Beloit delivered a trailing four-quarter earnings surprise of 31.56%, on average.

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