ABB CEO Says Power Product Margin Pressure Is Bottoming Out
February 16 2012 - 1:36AM
Dow Jones News
Electrical engineering company ABB Ltd. (ABB) Chief Executive
Joe Hogan said he sees indications that the decline in
profitability in its Power Products unit is coming to and end.
"Our hope is that start to see a bottoming of the price pressure
that [Power Products] has experienced over the last two or three
years," Hogan said on ABB's YouTube channel, in conjunction with
the company's fourth quarter report.
"The long-cycle nature of this business is indicating that is
going to occur soon," he added.
ABB's Power Product unit, which includes high-voltage products
such as circuit breakers and power transformers, saw its operating
profit margin decline to 11.4% in the fourth quarter of 2011 from
15.6% a year earlier.
However, Hogan said the unit has been involved in some extensive
cost cutting. Out of the $1 billion of costs ABB cut in 2011, power
products represented almost 40%.
"We have had a plan to reverse the decline [in Power Products
profitability], or at least mitigate it," Hogan said.
-By Sven Grundberg, Dow Jones Newswires; +46-8-5451-3098;
sven.grundberg@dowjones.com
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