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ABB Management Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: ABB

China orders stabilized, particularly in Low Voltage Products, where we had some issues in the first quarter. North America, still strong for us. We saw a rebound in the Middle East, and Europe, steady. I'd say there's a two-tier Europe, between North and South, we'll talk about it. But at least, there was a positive order for the quarter. Order price pressure in power is easing, and I say, slightly, but we do see that easing. Steady Power Project (sic) [Products] margins over the last 3 quarters, and Michel and I will explain that. Operational EBITDA decreased versus the second quarter of last year. Some negative mix, and obviously, the U.S. strong dollar translation, but we saw some good progress quarter-to-quarter.

Thomas & Betts acquisition is completed. We got about 6 weeks in, and we'll walk you through how that looks. And in divisions, delivered really solid cash from operations. But we'll talk to you about some of the cash short fall that we've had and as to why.

Moving to Chart 4. You can see that the orders were up 2% versus second quarter of last year. And then when you look from an organic standpoint, up 9%, and then plus 6% from an overall standpoint. Revenues organic about 3% at $9.7 billion. Our order backlog, there's some questions this morning on order backlog, if you adjust from a U.S. dollar standpoint, minus 3%, but in local currency, we actually saw an increase in our backlog close to $29 billion, overall.

From an operational EBITDA standpoint, our numbers were $1.471 billion, as you can see. That's about minus 5% overall, but minus 9% from an organic standpoint, when you look at the $60 million we received from Thomas & Betts in the quarter. That gives us an operational EBITDA percent of about 15.1% versus 16% of last year. Our net income, down 27%, and cash from operations, down 33%. That will imply, I guess, some explanation, and Michel and I will walk you through that shortly.

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