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ABB says Q2 profit falls on slow oil and gas business, strong dollar

ABB said on Thursday its net profit fell 8 percent in the second quarter due to a drop in demand for the Swiss company's oil and gas products, slower-than-expected business in the United States, soft demand from China and a strong dollar.

The Zurich-based power and automation firm told Reuters last month that a significant slowdown in China, a sharp drop in spending by customers in the oil and gas industry, and U.S. growth rates which are unlikely to match strong year-ago levels would weigh on its results this quarter.

On Thursday, ABB was similarly downbeat on its outlook.

"We expect continued hard-weather sailing but the execution of our 'Next Level' strategy will enable us to stay on course," CEO Ulrich Spiesshofer said in a statement.

Logos of ABB AG sit on display outside the company's semi-conductor plant in Lenzburg, Switzerland.
Gianluca Colla | Bloomberg | Getty Images
Logos of ABB AG sit on display outside the company's semi-conductor plant in Lenzburg, Switzerland.

ABB said net profit for the three months fell to $588 million from $636 million a year earlier, but beat analyst expectations for a net profit of $548 million in a Reuters poll of analysts.

ABB is also grappling with the arrival of new shareholder Cevian -- an activist fund which has pushed for major changes at European industrial companies such as Thyssenkrupp -- as well as speculation that it might split into two amid a turnaround at its power unit, and scepticism among some analysts about whether it can achieve its five-year targets.

The company didn't mention Cevian specifically in its statement on Thursday.