ABB aims to win Saudi projects in order surge

Visitors watch a 3-D presentation of the Neom project at a conference in Riyadh. ABB is targeting orders from the project. (Reuters)
Updated 27 October 2017
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ABB aims to win Saudi projects in order surge

ZURICH: ABB is confident of winning a slice of the $500 billion mega-city project in Saudi Arabia, as the Swiss engineering group on Thursday posted its strongest growth in new orders for more than two and-a-half years.
CEO Ulrich Spiesshofer returned from meeting members of the Saudi royal family to present ABB’s third-quarter earnings, which came in slightly ahead of analysts’ forecasts.
During his trip, Spiesshofer discussed Saudi Arabia’s plan to create a business and industrial zone, named Neom, extending across its borders into Jordan and Egypt, the biggest project yet in a series of efforts to free the Kingdom of its dependence on oil exports.
ABB, with three factories and a long history in Saudi Arabia, is well positioned to provide automation and power to high-tech industries setting up in the country, Spiesshofer told reporters, declining to quantify the value of projects ABB could bid for.
“There’s a wide range of opportunities and we will do our best to participate in that in the appropriate way,” Spiesshofer said.
He was speaking after ABB reported results slightly ahead of expectations and brightened its outlook for the global economy.
The power transmission and automation company said net profit rose 1 percent to $571 million, beating analyst estimates of $553 million in a Reuters poll.
Sales rose 6 percent to $8.72 billion, beating estimates of $8.52 billion, while new orders — a signal of future growth — were up 8 percent, in line with expectations at $8.16 billion and the fastest growth rate since the first quarter of 2015.
Analysts from Morgan Stanley described the results as encouraging, although Barclays said investors may have been hoping for more in light of the easy comparisons with last year when orders dropped 14 percent.
ABB’s stock reacted positively to the earnings update, gaining 3 percent in early trade, and was one of the top performing stocks on the Euro Stoxx industrial goods and services index. The stock is trading at its highest level since September 2008.
Spiesshofer acknowledged the easier comparison base, but said ABB was gaining momentum with small orders worth under $15 million rising in all regions and in all business areas.
“That means the ship of ABB is really going into a growth mode altogether,” Spiesshofer said. “Our many initiatives are paying off.”
The improvements showed the strategy of focusing on higher-growth areas such as digital technology, robotics and food and beverage markets, was working, he added.
“Going into 2018 with the slightly more favorable market development that we are witnessing,” he said, “I am confident that our ambition to accelerate growth momentum will pay off.”


Apple to build new $1 billion campus in Austin

Updated 13 December 2018
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Apple to build new $1 billion campus in Austin

  • Apple Inc. said it would spend $1 billion to build a second campus in Austin, Texas
  • Apple will also set up sites in Seattle, San Diego and Culver City, California

NEW YORK: Apple Inc. said on Thursday it would spend $1 billion to build a second campus in Austin, Texas that will house as many as 15,000 workers, amid a broader push by many US companies to create more jobs at home.
The iPhone maker had announced at the start of the year it would invest $30 billion in the United States, taking advantage of a tax windfall stemming from US President Donald Trump’s sweeping tax reforms.
The 133-acre campus in Austin will employ workers across various functions including engineering, R&D, operations and finance. The city is already home to the second largest number of Apple employees outside its headquarters in Cupertino, California.
Apple will also set up sites in Seattle, San Diego and Culver City, California and hire over 1,000 employees each in these locations, while also expanding operations in Pittsburgh, New York and Boulder, Colorado over the next three years.
Many American multinationals have been facing political pressure to ramp up investments at home as part of Trump’s “America First” policies, which have left the United States embroiled in a bitter trade war with China. The president has also warned of tariffs on iPhones and other Apple products imported from China.
Apple’s technology rival Amazon.com Inc. last month ended a months-long search for its second headquarters, picking New York City and an area just outside Washington, D.C. for massive new offices, with plans to create thousands of jobs.
The new Austin campus will be located less than a mile away from Apple’s existing facilities, and will first house 5,000 new employees with the capacity to expand to 15,000.
The company, which last year moved into its sleek “spaceship” campus in Cupertino, said jobs at the new Austin center would include engineering, research and development, finance and sales functions.