ABB reports four divisions on track, "Step change" program in Power Systems
ABB has announced a special programme for its Power Systems division, which includes transmission and distribution solutions, with the aim to "deepen business transformation".
The other four ABB divisions were described as "on track" by the company, including the Power Products category, which includes transformers and is distinct from Power Systems.
Power Products did, however, experience a decline in revenue of 4% year-on-year to $2.39 billion. Orders received were down 5% on the first quarter last year. Industrial and power distribution orders increased compared with the same quarter last year, but a decline in large transmission orders was down to utilities' caution and selectivity when it came to investments, ABB explained. The dip in revenue the company put down to the lower opening order backlog.
"We remain on track in four divisions who combined to deliver higher early-cycle orders, steady earnings and stronger cash flow in the first quarter," said ABB Chief Executive Officer Ulrich Spiesshofer.
"We are disappointed with the continued poor performance in Power Systems and are rigorously executing actions that go well beyond the previously-announced strategic realignment."
Power Systems saw a revenue decline in 22% year-on-year, to $1.6 billion from over $2 billion in the first quarter of 2013. Overall ABB Group saw a dip in revenue of 3%.
"After a thorough review, the new leadership has initiated a ‘step change' program and [has] already taken a number of corrective decisions. These include the discontinuation of bidding for solar EPC projects and further management changes. The transformation of PS will take longer than originally expected, but we remain confident that the outcome will be a strong and competitive business," Spiesshofer continued.
"Looking ahead, our ambitions in 2014 are to continue the solid performance in four of our five divisions and drive the turnaround in PS."