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More on ABB (ABB -0.5%) Q3: net profit -4% to $759M vs consensus of $764M. Orders -5% to $9.295B...

More on ABB (ABB -0.5%) Q3: net profit -4% to $759M vs consensus of $764M. Orders -5% to $9.295B vs $9.958B. Orders from U.S. +13%, China steady, Germany -64%, India -39%. CEO Joe Hogan is concerned about the economy right now but has "cautious optimism" for the long term. Interestingly, ABB notes "the stability of orders in China and southern Europe."
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Comments (3)
  • LongLake15
    , contributor
    Comments (10) | Send Message
     
    Part of their problem may also be that they have the Swiss franc as their currency which is very strong. It is hard to know if they get their payment in the currency of the country they do projects in which could be less than they would get if they were paid in francs or if they use a subsidiary in that country to receive payment.
    25 Oct 2012, 08:52 AM Reply Like
  • TwistTie
    , contributor
    Comments (2476) | Send Message
     
    When I bought ABB, I "worried" about the currency issue.

     

    I'm still worried I guess.

     

    What's new?
    25 Oct 2012, 11:07 AM Reply Like
  • LongLake15
    , contributor
    Comments (10) | Send Message
     
    According to their second quarter report they state "you could really say we have a structure of foreign exchange exposure on one side, which is just where we sell compared to where we manufacture. We had a cash flow exposure which we always hedge, for instance, when we take a project. As soon as the project is awarded, we hedge all the cash flows. And then we have this translation exposure, which is just simply the translation of reporting all the revenues and profits that we have made in non-dollar countries and reporting that into a U.S. dollar income statement. So these are the 3, the transactions, they are in the balance sheet, we fully hedge everything, and so there is no impact on that one."
    An example given was "at the corporate center, we always loan dollars, so when we hedge, we sell dollar forward. And so clearly, when the dollar goes down, these hedges generate cash; when the dollar goes up, the hedges consume cash."
    26 Oct 2012, 02:57 PM Reply Like
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