Keeping an Eye on Technology Futures, No Hidden Agendas, New Attitudes, No Platitudes!
ABB reported record orders, revenues and earnings for Q2 2008. Revenues increased to $9B, up 27%. EBIT jumped to $1.4B up 42%, and net income was $975M or 16.1%. Cash flow from operations more than doubled to $978B.
While others in the industrial automation business complain about weak markets, ABB reported bookings increase in all divisions, up 31% to a single-quarter record of $11.3B. This was the first quarter in which orders from emerging markets (51% of the total) exceeded orders from mature economies. That's the key to ABB success.
ABB continues its revenue growth through global operations; just plain good management brought operational improvements and increased profits.
A comparison of ABB and Rockwell stocks shows that conditions are VERY favorable for ABB to buy Rockwell. A year ago Rockwell was in the 70's and it's now at about 43 (about 45% down). ABB has increased from about 20 to 30, now at around 26, but with strong ratios and plenty of cash to buy an ailing Rockwell if it chooses.
Two weeks ago, ABB named Joseph Hogan, the head of GE Healthcare, as CEO. This is just 5 months after Fred Kindle was exited (March 08) reportedly for being too cautious about acquisitions. With more than $5 billion in cash on its balance sheet, ABB has not made any large deals in the past few years.
During his tenure at GE, Joseph Hogan spearheaded a number of large acquisitions including GE's biggest-ever acquisition, the $10B purchase of Amersham. Now expect Joe Hogan to bring out ABB's big guns. Rockwell will roll.
