YASKY - ABB Delivers Surprisingly Good Margins But End-Market Weakness Still Significant

• ABB beat on revenue and significantly beat on margins, but orders were only in line (and down year over year), as a fragile short-cycle recovery is still offset by weakness elsewhere.
• Weakness in buildings within Electrical is worth watching, but ABB may be outperforming in robotics, and overall performance in industrial/discrete automation was encouraging.
• With a November CMD, look for more commentary/guidance on margin improvement, the industrial software strategy, and potential asset disposals.
• ABB shares look priced for a high single-digit annualized return (on DCF), which isn't bad on a sector-relative basis.

For further details see: