Zacks Investment Research downgraded
) to a Zacks Rank #5 (Strong Sell) on Jul 26.
Why the Downgrade?
ABB witnessed sharp downward estimate revisions after reporting
dismal second-quarter 2014 results.
On Jul 23, ABB reported second-quarter 2014 earnings per share
of 28 cents, missing the Zacks Consensus Estimate of 30 cents and
tumbling 15.2% from the prior-year quarter's figure of 33 cents.
The company had missed the Zacks Consensus Estimate in 3 of the 4
trailing quarters with an average miss of 8.1%.
Revenues for the quarter were approximately flat year over year
at $10.2 billion but lagged the Zacks Consensus Estimate of $10.5
The company's results had been impacted by the continued
weakness in its Power Systems segment. This apart, the performance
of Process Automation and Power Products segments were also below
Though the strong order growth led to a temporary gain in share
prices on Jul 24, weakness in some of its segments especially,
Power Systems and the shrinking margins remain headwinds going
The Zacks Consensus Estimate for 2014 earnings dipped 3.3% to
$1.20 per share, reflecting a yearly decline of 2.44%. For fiscal
2015 also, the Zacks Consensus Estimate declined 5.3% to $1.53 per
Estimates for fiscal 2014 and 2015 dropped 3.1% and 5.3% to
$1.20 and $1.53 per share, respectively.
Other Stocks to Consider
Some better-ranked stocks that can be considered at present
include EnerSys (
), AO Smith Corp. (
) and Emerson Electric Co. (
). While EnerSys sports a Zacks Rank #1 (Strong Buy), both AO Smith
and Emerson Electric Co have a Zacks Rank #2 (Buy).
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