Global power group ABB’s earnings dropped for a third consecutive quarter, missing analyst estimates, amid mounting charges at the unit for offshore wind and solar projects.
Second-quarter net income fell 17% to $636million, the Swiss maker of grid connections and robots said in a statement. The analyst average estimate was for $701million.
The stock dropped as much as 2.6% in Swiss trading, valuing the Zurich-based company at $53billion.
The worse-than-estimated earnings show how ABB is grappling with delays to complex renewable energy projects, adding urgency to restructuring measures as management works on a new long-term strategy.
ABB chief executive Ulrich Spiesshofer, who took over last year, has pledged to return the Power Systems unit to profitability after ruling out an exit from the loss-making business.
“We are working relentlessly on the execution of large offshore wind projects. The team is making good progress in the right direction,” Spiesshofer said.
“We are taking decisive actions, de-risking the business model.”
ABB earlier this year flagged that charges from offshore wind and solar projects could resurface in coming quarters.
Other European engineering companies have also struggled with charges related to wind and solar projects.
German rival Siemens has posted charges of more than 800million euros since 2011 relating to delays in linking offshore wind farms in the North Sea to the grid.
ABB is the world’s number 1 in power transmission, ahead of Munich-based Siemens and France’s Alstom.
As part of the turnaround, ABB’s Power Systems unit has ceased bidding for orders to design and build solar power plants.
Losses from managing big-ticket offshore wind and solar-power projects meant the Power Systems unit reported a $24million loss in the quarter at an operating EBITDA level.
In other divisions, operating profitability was stable or higher, the company said.
ABB’s quarterly sales of $10.2billion remained flat, in line with estimates.
